Correlation Between Faraday Copper and AuQ Gold
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and AuQ 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 Faraday Copper and AuQ Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and AuQ Gold Mining, you can compare the effects of market volatilities on Faraday Copper and AuQ 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 Faraday Copper with a short position of AuQ Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and AuQ Gold.
Diversification Opportunities for Faraday Copper and AuQ Gold
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Faraday and AuQ is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and AuQ Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AuQ Gold Mining and Faraday Copper 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 Faraday Copper Corp are associated (or correlated) with AuQ Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AuQ Gold Mining has no effect on the direction of Faraday Copper i.e., Faraday Copper and AuQ Gold go up and down completely randomly.
Pair Corralation between Faraday Copper and AuQ Gold
Assuming the 90 days trading horizon Faraday Copper is expected to generate 5.78 times less return on investment than AuQ Gold. But when comparing it to its historical volatility, Faraday Copper Corp is 2.37 times less risky than AuQ Gold. It trades about 0.02 of its potential returns per unit of risk. AuQ Gold Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 27.00 in AuQ Gold Mining on November 30, 2024 and sell it today you would lose (1.00) from holding AuQ Gold Mining or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. AuQ Gold Mining
Performance |
| Timeline |
| Faraday Copper Corp |
| AuQ Gold Mining |
Faraday Copper and AuQ Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and AuQ Gold
The main advantage of trading using opposite Faraday Copper and AuQ Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, AuQ 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 AuQ Gold will offset losses from the drop in AuQ Gold's long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. ATEX Resources | Faraday Copper vs. Marimaca Copper Corp |
| AuQ Gold vs. First Majestic Silver | AuQ Gold vs. Ivanhoe Energy | AuQ Gold vs. Flinders Resources Limited | AuQ 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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