Correlation Between Fury Gold and IGO
Can any of the company-specific risk be diversified away by investing in both Fury Gold and IGO 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 Fury Gold and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fury Gold Mines and IGO Limited, you can compare the effects of market volatilities on Fury Gold and IGO 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 Fury Gold with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fury Gold and IGO.
Diversification Opportunities for Fury Gold and IGO
Significant diversification
The 3 months correlation between Fury and IGO is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fury Gold Mines and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Fury 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 Fury Gold Mines are associated (or correlated) with IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Fury Gold i.e., Fury Gold and IGO go up and down completely randomly.
Pair Corralation between Fury Gold and IGO
Given the investment horizon of 90 days Fury Gold Mines is expected to generate 0.74 times more return on investment than IGO. However, Fury Gold Mines is 1.34 times less risky than IGO. It trades about 0.01 of its potential returns per unit of risk. IGO Limited is currently generating about 0.01 per unit of risk. If you would invest 46.00 in Fury Gold Mines on September 2, 2024 and sell it today you would lose (4.00) from holding Fury Gold Mines or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Fury Gold Mines vs. IGO Limited
Performance |
| Timeline |
| Fury Gold Mines |
| IGO Limited |
Fury Gold and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fury Gold and IGO
The main advantage of trading using opposite Fury Gold and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fury Gold position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Fury Gold vs. Teck Resources Ltd | Fury Gold vs. Sigma Lithium Resources | Fury Gold vs. Vale SA ADR | Fury Gold vs. Sayona Mining Limited |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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