Correlation Between Faraday Copper and St Augustine
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and St Augustine 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 St Augustine 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 St Augustine Gold, you can compare the effects of market volatilities on Faraday Copper and St Augustine 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 St Augustine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and St Augustine.
Diversification Opportunities for Faraday Copper and St Augustine
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Faraday and SAU is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and St Augustine Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Augustine Gold 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 St Augustine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Augustine Gold has no effect on the direction of Faraday Copper i.e., Faraday Copper and St Augustine go up and down completely randomly.
Pair Corralation between Faraday Copper and St Augustine
Assuming the 90 days trading horizon Faraday Copper is expected to generate 1.21 times less return on investment than St Augustine. But when comparing it to its historical volatility, Faraday Copper Corp is 2.23 times less risky than St Augustine. It trades about 0.05 of its potential returns per unit of risk. St Augustine Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.00 in St Augustine Gold on August 26, 2024 and sell it today you would earn a total of 0.00 from holding St Augustine Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. St Augustine Gold
Performance |
| Timeline |
| Faraday Copper Corp |
| St Augustine Gold |
Faraday Copper and St Augustine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and St Augustine
The main advantage of trading using opposite Faraday Copper and St Augustine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, St Augustine 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 St Augustine will offset losses from the drop in St Augustine's long position.| Faraday Copper vs. First Majestic Silver | Faraday Copper vs. Ivanhoe Energy | Faraday Copper vs. Orezone Gold Corp |
| St Augustine vs. Northcliff Resources | St Augustine vs. Lupaka Gold Corp | St Augustine vs. Angkor Resources Corp | St Augustine vs. Minco Capital 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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