Correlation Between FG Acquisition and PJX Resources
Can any of the company-specific risk be diversified away by investing in both FG Acquisition and PJX 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 FG Acquisition and PJX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FG Acquisition Corp and PJX Resources, you can compare the effects of market volatilities on FG Acquisition and PJX 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 FG Acquisition with a short position of PJX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of FG Acquisition and PJX Resources.
Diversification Opportunities for FG Acquisition and PJX Resources
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FGAA-U and PJX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FG Acquisition Corp and PJX Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJX Resources and FG Acquisition 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 FG Acquisition Corp are associated (or correlated) with PJX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJX Resources has no effect on the direction of FG Acquisition i.e., FG Acquisition and PJX Resources go up and down completely randomly.
Pair Corralation between FG Acquisition and PJX Resources
Assuming the 90 days trading horizon FG Acquisition is expected to generate 4.32 times less return on investment than PJX Resources. But when comparing it to its historical volatility, FG Acquisition Corp is 15.27 times less risky than PJX Resources. It trades about 0.15 of its potential returns per unit of risk. PJX Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10.00 in PJX Resources on September 1, 2024 and sell it today you would earn a total of 1.00 from holding PJX Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
FG Acquisition Corp vs. PJX Resources
Performance |
| Timeline |
| FG Acquisition Corp |
| PJX Resources |
FG Acquisition and PJX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FG Acquisition and PJX Resources
The main advantage of trading using opposite FG Acquisition and PJX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Acquisition position performs unexpectedly, PJX 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 PJX Resources will offset losses from the drop in PJX Resources' long position.| FG Acquisition vs. InPlay Oil Corp | FG Acquisition vs. Quisitive Technology Solutions | FG Acquisition vs. Ramp Metals | FG Acquisition vs. Network Media Group |
| PJX Resources vs. Kiplin Metals | PJX Resources vs. Pure Energy Minerals | PJX Resources vs. Noram Lithium Corp | PJX Resources vs. Minnova 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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