Correlation Between Forum Energy and Boss Resources
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Boss Resources 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 Forum Energy and Boss Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Metals and Boss Resources, you can compare the effects of market volatilities on Forum Energy and Boss Resources 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 Forum Energy with a short position of Boss Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Boss Resources.
Diversification Opportunities for Forum Energy and Boss Resources
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forum and Boss is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Metals and Boss Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Resources and Forum Energy 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 Forum Energy Metals are associated (or correlated) with Boss Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Resources has no effect on the direction of Forum Energy i.e., Forum Energy and Boss Resources go up and down completely randomly.
Pair Corralation between Forum Energy and Boss Resources
Assuming the 90 days horizon Forum Energy Metals is expected to generate 2.14 times more return on investment than Boss Resources. However, Forum Energy is 2.14 times more volatile than Boss Resources. It trades about 0.02 of its potential returns per unit of risk. Boss Resources is currently generating about 0.02 per unit of risk. If you would invest 8.00 in Forum Energy Metals on November 2, 2024 and sell it today you would lose (3.89) from holding Forum Energy Metals or give up 48.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Forum Energy Metals vs. Boss Resources
Performance |
| Timeline |
| Forum Energy Metals |
| Boss Resources |
Forum Energy and Boss Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Boss Resources
The main advantage of trading using opposite Forum Energy and Boss Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Boss Resources 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 Boss Resources will offset losses from the drop in Boss Resources' long position.| Forum Energy vs. Namibia Critical Metals | Forum Energy vs. Themac Resources Group | Forum Energy vs. Pasinex Resources Limited | Forum Energy vs. NGEx Minerals |
| Boss Resources vs. NGEx Minerals | Boss Resources vs. Forum Energy Metals | Boss Resources vs. Global Atomic Corp | Boss Resources vs. Kraken Energy 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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