Correlation Between First Mining and Hummingbird Resources
Can any of the company-specific risk be diversified away by investing in both First Mining and Hummingbird Resources 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 First Mining and Hummingbird Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Mining Gold and Hummingbird Resources PLC, you can compare the effects of market volatilities on First Mining and Hummingbird Resources 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 First Mining with a short position of Hummingbird Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mining and Hummingbird Resources.
Diversification Opportunities for First Mining and Hummingbird Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Hummingbird is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding First Mining Gold and Hummingbird Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hummingbird Resources PLC and First Mining 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 First Mining Gold are associated (or correlated) with Hummingbird Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hummingbird Resources PLC has no effect on the direction of First Mining i.e., First Mining and Hummingbird Resources go up and down completely randomly.
Pair Corralation between First Mining and Hummingbird Resources
Assuming the 90 days horizon First Mining Gold is expected to under-perform the Hummingbird Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, First Mining Gold is 3.55 times less risky than Hummingbird Resources. The otc stock trades about -0.11 of its potential returns per unit of risk. The Hummingbird Resources PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3.20 in Hummingbird Resources PLC on December 1, 2024 and sell it today you would lose (0.10) from holding Hummingbird Resources PLC or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mining Gold vs. Hummingbird Resources PLC
Performance |
| Timeline |
| First Mining Gold |
| Hummingbird Resources PLC |
First Mining and Hummingbird Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mining and Hummingbird Resources
The main advantage of trading using opposite First Mining and Hummingbird Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mining position performs unexpectedly, Hummingbird Resources 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 Hummingbird Resources will offset losses from the drop in Hummingbird Resources' long position.| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
| Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold Corp | Hummingbird Resources vs. Robex Resources |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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