Correlation Between Faraday Copper and Grande Portage
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Grande Portage 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 Grande Portage 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 Grande Portage Resources, you can compare the effects of market volatilities on Faraday Copper and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Grande Portage.
Diversification Opportunities for Faraday Copper and Grande Portage
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Faraday and Grande is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage 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 Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of Faraday Copper i.e., Faraday Copper and Grande Portage go up and down completely randomly.
Pair Corralation between Faraday Copper and Grande Portage
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.27 times more return on investment than Grande Portage. However, Faraday Copper Corp is 3.72 times less risky than Grande Portage. It trades about -0.09 of its potential returns per unit of risk. Grande Portage Resources is currently generating about -0.25 per unit of risk. If you would invest 90.00 in Faraday Copper Corp on August 29, 2024 and sell it today you would lose (4.00) from holding Faraday Copper Corp or give up 4.44% 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. Grande Portage Resources
Performance |
| Timeline |
| Faraday Copper Corp |
| Grande Portage Resources |
Faraday Copper and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Grande Portage
The main advantage of trading using opposite Faraday Copper and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage's long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
| Grande Portage vs. First Majestic Silver | Grande Portage vs. Ivanhoe Energy | Grande Portage vs. Orezone Gold Corp | Grande Portage vs. Faraday Copper 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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