Correlation Between Foraco International and Stallion Gold
Can any of the company-specific risk be diversified away by investing in both Foraco International and Stallion 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 Stallion 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 Stallion Gold Corp, you can compare the effects of market volatilities on Foraco International and Stallion 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 Stallion Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foraco International and Stallion Gold.
Diversification Opportunities for Foraco International and Stallion Gold
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Foraco and Stallion is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Foraco International SA and Stallion Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stallion 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 Stallion Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stallion Gold Corp has no effect on the direction of Foraco International i.e., Foraco International and Stallion Gold go up and down completely randomly.
Pair Corralation between Foraco International and Stallion Gold
Assuming the 90 days trading horizon Foraco International SA is expected to under-perform the Stallion Gold. But the stock apears to be less risky and, when comparing its historical volatility, Foraco International SA is 2.24 times less risky than Stallion Gold. The stock trades about -0.16 of its potential returns per unit of risk. The Stallion Gold Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Stallion Gold Corp on December 4, 2024 and sell it today you would lose (2.00) from holding Stallion Gold Corp or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Foraco International SA vs. Stallion Gold Corp
Performance |
| Timeline |
| Foraco International |
| Stallion Gold Corp |
Foraco International and Stallion Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foraco International and Stallion Gold
The main advantage of trading using opposite Foraco International and Stallion Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foraco International position performs unexpectedly, Stallion 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 Stallion Gold will offset losses from the drop in Stallion Gold's long position.| Foraco International vs. Orbit Garant Drilling | Foraco International vs. Geodrill Limited | Foraco International vs. Mccoy Global | Foraco International vs. Bri Chem Corp |
| Stallion Gold vs. First Majestic Silver | Stallion Gold vs. Ivanhoe Energy | Stallion Gold vs. Flinders Resources Limited | Stallion Gold vs. Orezone Gold 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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