Correlation Between FutureFuel Corp and Sibanye Gold
Can any of the company-specific risk be diversified away by investing in both FutureFuel Corp and Sibanye 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 FutureFuel Corp and Sibanye Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FutureFuel Corp and Sibanye Gold Ltd, you can compare the effects of market volatilities on FutureFuel Corp and Sibanye 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 FutureFuel Corp with a short position of Sibanye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of FutureFuel Corp and Sibanye Gold.
Diversification Opportunities for FutureFuel Corp and Sibanye Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FutureFuel and Sibanye is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding FutureFuel Corp and Sibanye Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Gold and FutureFuel Corp 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 FutureFuel Corp are associated (or correlated) with Sibanye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Gold has no effect on the direction of FutureFuel Corp i.e., FutureFuel Corp and Sibanye Gold go up and down completely randomly.
Pair Corralation between FutureFuel Corp and Sibanye Gold
Allowing for the 90-day total investment horizon FutureFuel Corp is expected to generate 0.78 times more return on investment than Sibanye Gold. However, FutureFuel Corp is 1.29 times less risky than Sibanye Gold. It trades about 0.05 of its potential returns per unit of risk. Sibanye Gold Ltd is currently generating about 0.0 per unit of risk. If you would invest 376.00 in FutureFuel Corp on November 9, 2024 and sell it today you would earn a total of 129.00 from holding FutureFuel Corp or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FutureFuel Corp vs. Sibanye Gold Ltd
Performance |
| Timeline |
| FutureFuel Corp |
| Sibanye Gold |
FutureFuel Corp and Sibanye Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FutureFuel Corp and Sibanye Gold
The main advantage of trading using opposite FutureFuel Corp and Sibanye Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FutureFuel Corp position performs unexpectedly, Sibanye 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 Sibanye Gold will offset losses from the drop in Sibanye Gold's long position.| FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. Quaker Chemical | FutureFuel Corp vs. Ecovyst | FutureFuel Corp vs. Minerals Technologies |
| Sibanye Gold vs. AngloGold Ashanti plc | Sibanye Gold vs. Harmony Gold Mining | Sibanye Gold vs. Eldorado Gold Corp | Sibanye Gold vs. Kinross Gold |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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