Correlation Between Foraco International and Prosper Gold
Can any of the company-specific risk be diversified away by investing in both Foraco International and Prosper Gold 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 Foraco International and Prosper Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foraco International SA and Prosper Gold Corp, you can compare the effects of market volatilities on Foraco International and Prosper Gold 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 Foraco International with a short position of Prosper Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foraco International and Prosper Gold.
Diversification Opportunities for Foraco International and Prosper Gold
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Foraco and Prosper is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Foraco International SA and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper Gold Corp and Foraco International 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 Foraco International SA are associated (or correlated) with Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of Foraco International i.e., Foraco International and Prosper Gold go up and down completely randomly.
Pair Corralation between Foraco International and Prosper Gold
Assuming the 90 days trading horizon Foraco International SA is expected to generate 0.38 times more return on investment than Prosper Gold. However, Foraco International SA is 2.65 times less risky than Prosper Gold. It trades about 0.05 of its potential returns per unit of risk. Prosper Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 137.00 in Foraco International SA on September 14, 2024 and sell it today you would earn a total of 90.00 from holding Foraco International SA or generate 65.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Foraco International SA vs. Prosper Gold Corp
Performance |
| Timeline |
| Foraco International |
| Prosper Gold Corp |
Foraco International and Prosper Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foraco International and Prosper Gold
The main advantage of trading using opposite Foraco International and Prosper Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foraco International position performs unexpectedly, Prosper Gold 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 Prosper Gold will offset losses from the drop in Prosper Gold's long position.| Foraco International vs. Geodrill Limited | Foraco International vs. Major Drilling Group | Foraco International vs. Bri Chem Corp |
| Prosper Gold vs. Foraco International SA | Prosper Gold vs. Geodrill Limited | Prosper Gold vs. Major Drilling Group | Prosper Gold vs. Bri Chem Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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