Correlation Between Faraday Copper and Flinders Resources
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Flinders 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 Faraday Copper and Flinders Resources 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 Flinders Resources Limited, you can compare the effects of market volatilities on Faraday Copper and Flinders 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 Faraday Copper with a short position of Flinders Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Flinders Resources.
Diversification Opportunities for Faraday Copper and Flinders Resources
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Faraday and Flinders is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Flinders Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flinders Resources 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 Flinders Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flinders Resources has no effect on the direction of Faraday Copper i.e., Faraday Copper and Flinders Resources go up and down completely randomly.
Pair Corralation between Faraday Copper and Flinders Resources
Assuming the 90 days trading horizon Faraday Copper is expected to generate 20.24 times less return on investment than Flinders Resources. But when comparing it to its historical volatility, Faraday Copper Corp is 1.99 times less risky than Flinders Resources. It trades about 0.01 of its potential returns per unit of risk. Flinders Resources Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Flinders Resources Limited on October 11, 2024 and sell it today you would earn a total of 569.00 from holding Flinders Resources Limited or generate 2845.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Flinders Resources Limited
Performance |
| Timeline |
| Faraday Copper Corp |
| Flinders Resources |
Faraday Copper and Flinders Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Flinders Resources
The main advantage of trading using opposite Faraday Copper and Flinders Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Flinders 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 Flinders Resources will offset losses from the drop in Flinders Resources' long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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