Correlation Between Forum Energy and Flying Nickel
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Flying Nickel 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 Flying Nickel 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 Flying Nickel Mining, you can compare the effects of market volatilities on Forum Energy and Flying Nickel 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 Flying Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Flying Nickel.
Diversification Opportunities for Forum Energy and Flying Nickel
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Forum and Flying is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Metals and Flying Nickel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flying Nickel Mining 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 Flying Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flying Nickel Mining has no effect on the direction of Forum Energy i.e., Forum Energy and Flying Nickel go up and down completely randomly.
Pair Corralation between Forum Energy and Flying Nickel
Assuming the 90 days horizon Forum Energy Metals is expected to under-perform the Flying Nickel. But the otc stock apears to be less risky and, when comparing its historical volatility, Forum Energy Metals is 2.1 times less risky than Flying Nickel. The otc stock trades about -0.02 of its potential returns per unit of risk. The Flying Nickel Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3.32 in Flying Nickel Mining on August 29, 2024 and sell it today you would earn a total of 0.12 from holding Flying Nickel Mining or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Metals vs. Flying Nickel Mining
Performance |
| Timeline |
| Forum Energy Metals |
| Flying Nickel Mining |
Forum Energy and Flying Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Flying Nickel
The main advantage of trading using opposite Forum Energy and Flying Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Flying Nickel 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 Flying Nickel will offset losses from the drop in Flying Nickel's 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 |
| Flying Nickel vs. Euro Manganese | Flying Nickel vs. Lithium Australia NL | Flying Nickel vs. Bushveld Minerals Limited | Flying Nickel vs. Core Assets 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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