Correlation Between Foran Mining and Saga Metals
Can any of the company-specific risk be diversified away by investing in both Foran Mining and Saga Metals 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 Foran Mining and Saga Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foran Mining and Saga Metals Corp, you can compare the effects of market volatilities on Foran Mining and Saga Metals 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 Foran Mining with a short position of Saga Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foran Mining and Saga Metals.
Diversification Opportunities for Foran Mining and Saga Metals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Foran and Saga is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Foran Mining and Saga Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Metals Corp and Foran 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 Foran Mining are associated (or correlated) with Saga Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Metals Corp has no effect on the direction of Foran Mining i.e., Foran Mining and Saga Metals go up and down completely randomly.
Pair Corralation between Foran Mining and Saga Metals
Assuming the 90 days trading horizon Foran Mining is expected to under-perform the Saga Metals. But the stock apears to be less risky and, when comparing its historical volatility, Foran Mining is 1.58 times less risky than Saga Metals. The stock trades about -0.1 of its potential returns per unit of risk. The Saga Metals Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Saga Metals Corp on November 4, 2024 and sell it today you would earn a total of 3.00 from holding Saga Metals Corp or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foran Mining vs. Saga Metals Corp
Performance |
| Timeline |
| Foran Mining |
| Saga Metals Corp |
Foran Mining and Saga Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foran Mining and Saga Metals
The main advantage of trading using opposite Foran Mining and Saga Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foran Mining position performs unexpectedly, Saga Metals 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 Saga Metals will offset losses from the drop in Saga Metals' long position.| Foran Mining vs. Algonquin Power Utilities | Foran Mining vs. Titanium Transportation Group | Foran Mining vs. VIP Entertainment Technologies | Foran Mining vs. TGS Esports |
| Saga Metals vs. Diversified Royalty Corp | Saga Metals vs. InPlay Oil Corp | Saga Metals vs. Canadian General Investments | Saga Metals vs. HPQ Silicon 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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