Correlation Between FireFox Gold and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both FireFox Gold and Aurion 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 FireFox Gold and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FireFox Gold Corp and Aurion Resources, you can compare the effects of market volatilities on FireFox Gold and Aurion 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 FireFox Gold with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of FireFox Gold and Aurion Resources.
Diversification Opportunities for FireFox Gold and Aurion Resources
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FireFox and Aurion is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FireFox Gold Corp and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and FireFox Gold 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 FireFox Gold Corp are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of FireFox Gold i.e., FireFox Gold and Aurion Resources go up and down completely randomly.
Pair Corralation between FireFox Gold and Aurion Resources
Assuming the 90 days horizon FireFox Gold Corp is expected to generate 2.04 times more return on investment than Aurion Resources. However, FireFox Gold is 2.04 times more volatile than Aurion Resources. It trades about 0.02 of its potential returns per unit of risk. Aurion Resources is currently generating about 0.03 per unit of risk. If you would invest 4.00 in FireFox Gold Corp on August 29, 2024 and sell it today you would lose (1.25) from holding FireFox Gold Corp or give up 31.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FireFox Gold Corp vs. Aurion Resources
Performance |
| Timeline |
| FireFox Gold Corp |
| Aurion Resources |
FireFox Gold and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FireFox Gold and Aurion Resources
The main advantage of trading using opposite FireFox Gold and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FireFox Gold position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| FireFox Gold vs. Palamina Corp | FireFox Gold vs. Gold Springs Resource | FireFox Gold vs. BTU Metals Corp | FireFox Gold vs. Norsemont Mining |
| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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