Correlation Between Filo Mining and Red Moon
Can any of the company-specific risk be diversified away by investing in both Filo Mining and Red Moon 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 Filo Mining and Red Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Filo Mining Corp and Red Moon Resources, you can compare the effects of market volatilities on Filo Mining and Red Moon 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 Filo Mining with a short position of Red Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filo Mining and Red Moon.
Diversification Opportunities for Filo Mining and Red Moon
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Filo and Red is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Filo Mining Corp and Red Moon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Moon Resources and Filo 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 Filo Mining Corp are associated (or correlated) with Red Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Moon Resources has no effect on the direction of Filo Mining i.e., Filo Mining and Red Moon go up and down completely randomly.
Pair Corralation between Filo Mining and Red Moon
Assuming the 90 days horizon Filo Mining Corp is expected to generate 0.5 times more return on investment than Red Moon. However, Filo Mining Corp is 1.99 times less risky than Red Moon. It trades about 0.14 of its potential returns per unit of risk. Red Moon Resources is currently generating about 0.01 per unit of risk. If you would invest 1,714 in Filo Mining Corp on September 3, 2024 and sell it today you would earn a total of 591.00 from holding Filo Mining Corp or generate 34.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Filo Mining Corp vs. Red Moon Resources
Performance |
| Timeline |
| Filo Mining Corp |
| Red Moon Resources |
Filo Mining and Red Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Filo Mining and Red Moon
The main advantage of trading using opposite Filo Mining and Red Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Filo Mining position performs unexpectedly, Red Moon 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 Red Moon will offset losses from the drop in Red Moon's long position.| Filo Mining vs. Qubec Nickel Corp | Filo Mining vs. IGO Limited | Filo Mining vs. Avarone Metals | Filo Mining vs. Adriatic Metals PLC |
| Red Moon vs. Qubec Nickel Corp | Red Moon vs. IGO Limited | Red Moon vs. Avarone Metals | Red Moon vs. Adriatic Metals PLC |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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