Correlation Between First American and Global Energy
Can any of the company-specific risk be diversified away by investing in both First American and Global Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First American and Global Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Silver and Global Energy Metals, you can compare the effects of market volatilities on First American and Global Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First American with a short position of Global Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Global Energy.
Diversification Opportunities for First American and Global Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Global Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Energy Metals and First American is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First American Silver are associated (or correlated) with Global Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Energy Metals has no effect on the direction of First American i.e., First American and Global Energy go up and down completely randomly.
Pair Corralation between First American and Global Energy
If you would invest 0.01 in First American Silver on August 25, 2024 and sell it today you would earn a total of 0.00 from holding First American Silver or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Silver vs. Global Energy Metals
Performance |
| Timeline |
| First American Silver |
| Global Energy Metals |
First American and Global Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Global Energy
The main advantage of trading using opposite First American and Global Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Global Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Global Energy will offset losses from the drop in Global Energy's long position.| First American vs. Norra Metals Corp | First American vs. ZincX Resources Corp | First American vs. Nuinsco Resources Limited | First American vs. South Star Battery |
| Global Energy vs. Norra Metals Corp | Global Energy vs. ZincX Resources Corp | Global Energy vs. Nuinsco Resources Limited | Global Energy vs. South Star Battery |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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