Correlation Between Faraday Copper and New Age
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and New Age 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 New Age 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 New Age Metals, you can compare the effects of market volatilities on Faraday Copper and New Age 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 New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and New Age.
Diversification Opportunities for Faraday Copper and New Age
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Faraday and New is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals 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 New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of Faraday Copper i.e., Faraday Copper and New Age go up and down completely randomly.
Pair Corralation between Faraday Copper and New Age
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.33 times more return on investment than New Age. However, Faraday Copper Corp is 3.04 times less risky than New Age. It trades about -0.07 of its potential returns per unit of risk. New Age Metals is currently generating about -0.17 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 (3.00) from holding Faraday Copper Corp or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Faraday Copper Corp vs. New Age Metals
Performance |
| Timeline |
| Faraday Copper Corp |
| New Age Metals |
Faraday Copper and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and New Age
The main advantage of trading using opposite Faraday Copper and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age's long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
| New Age vs. Stillwater Critical Minerals | New Age vs. Grid Metals Corp | New Age vs. Kore Mining | New Age vs. Imagine Lithium |
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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