Correlation Between Fury Gold and Nexa Resources

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Can any of the company-specific risk be diversified away by investing in both Fury Gold and Nexa 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 Fury Gold and Nexa Resources 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 Nexa Resources SA, you can compare the effects of market volatilities on Fury Gold and Nexa 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 Fury Gold with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fury Gold and Nexa Resources.

Diversification Opportunities for Fury Gold and Nexa Resources

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fury and Nexa is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fury Gold Mines and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA 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 Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Fury Gold i.e., Fury Gold and Nexa Resources go up and down completely randomly.

Pair Corralation between Fury Gold and Nexa Resources

Given the investment horizon of 90 days Fury Gold Mines is expected to under-perform the Nexa Resources. In addition to that, Fury Gold is 1.93 times more volatile than Nexa Resources SA. It trades about -0.01 of its total potential returns per unit of risk. Nexa Resources SA is currently generating about 0.0 per unit of volatility. If you would invest  789.00  in Nexa Resources SA on August 25, 2024 and sell it today you would lose (29.00) from holding Nexa Resources SA or give up 3.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fury Gold Mines  vs.  Nexa Resources SA

 Performance 
       Timeline  
Fury Gold Mines 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Fury Gold Mines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Fury Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Nexa Resources SA 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Nexa Resources SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Nexa Resources sustained solid returns over the last few months and may actually be approaching a breakup point.

Fury Gold and Nexa Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fury Gold and Nexa Resources

The main advantage of trading using opposite Fury Gold and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fury Gold position performs unexpectedly, Nexa 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.
The idea behind Fury Gold Mines and Nexa Resources SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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