Correlation Between Faraday Copper and Maple Gold
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Maple 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 Maple 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 Maple Gold Mines, you can compare the effects of market volatilities on Faraday Copper and Maple 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 Maple Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Maple Gold.
Diversification Opportunities for Faraday Copper and Maple Gold
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Faraday and Maple is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines 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 Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of Faraday Copper i.e., Faraday Copper and Maple Gold go up and down completely randomly.
Pair Corralation between Faraday Copper and Maple Gold
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.53 times more return on investment than Maple Gold. However, Faraday Copper Corp is 1.88 times less risky than Maple Gold. It trades about 0.05 of its potential returns per unit of risk. Maple Gold Mines is currently generating about 0.01 per unit of risk. If you would invest 63.00 in Faraday Copper Corp on August 29, 2024 and sell it today you would earn a total of 24.00 from holding Faraday Copper Corp or generate 38.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Faraday Copper Corp vs. Maple Gold Mines
Performance |
| Timeline |
| Faraday Copper Corp |
| Maple Gold Mines |
Faraday Copper and Maple Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Maple Gold
The main advantage of trading using opposite Faraday Copper and Maple Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Maple 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 Maple Gold will offset losses from the drop in Maple Gold's long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
| Maple Gold vs. Liberty Gold Corp | Maple Gold vs. Cartier Resources | Maple Gold vs. Banyan Gold Corp | Maple Gold vs. Maritime Resources 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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