Correlation Between First Mining and Mene
Can any of the company-specific risk be diversified away by investing in both First Mining and Mene 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 Mene 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 Mene Inc, you can compare the effects of market volatilities on First Mining and Mene 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 Mene. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mining and Mene.
Diversification Opportunities for First Mining and Mene
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Mene is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding First Mining Gold and Mene Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mene Inc 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 Mene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mene Inc has no effect on the direction of First Mining i.e., First Mining and Mene go up and down completely randomly.
Pair Corralation between First Mining and Mene
Assuming the 90 days horizon First Mining is expected to generate 5.26 times less return on investment than Mene. But when comparing it to its historical volatility, First Mining Gold is 1.23 times less risky than Mene. It trades about 0.01 of its potential returns per unit of risk. Mene Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.50 in Mene Inc on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Mene Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mining Gold vs. Mene Inc
Performance |
| Timeline |
| First Mining Gold |
| Mene Inc |
First Mining and Mene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mining and Mene
The main advantage of trading using opposite First Mining and Mene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mining position performs unexpectedly, Mene 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 Mene will offset losses from the drop in Mene's long position.| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
| Mene vs. Lanvin Group Holdings | Mene vs. MYT Netherlands Parent | Mene vs. Movado Group | Mene vs. Birks Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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