Correlation Between Fury Gold and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both Fury Gold and Nouveau Monde 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 Nouveau Monde 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 Nouveau Monde Graphite, you can compare the effects of market volatilities on Fury Gold and Nouveau Monde 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 Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fury Gold and Nouveau Monde.
Diversification Opportunities for Fury Gold and Nouveau Monde
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fury and Nouveau is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fury Gold Mines and Nouveau Monde Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Monde Graphite 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 Nouveau Monde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Monde Graphite has no effect on the direction of Fury Gold i.e., Fury Gold and Nouveau Monde go up and down completely randomly.
Pair Corralation between Fury Gold and Nouveau Monde
Given the investment horizon of 90 days Fury Gold Mines is expected to generate 1.1 times more return on investment than Nouveau Monde. However, Fury Gold is 1.1 times more volatile than Nouveau Monde Graphite. It trades about 0.03 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.05 per unit of risk. If you would invest 36.00 in Fury Gold Mines on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Fury Gold Mines or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fury Gold Mines vs. Nouveau Monde Graphite
Performance |
| Timeline |
| Fury Gold Mines |
| Nouveau Monde Graphite |
Fury Gold and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fury Gold and Nouveau Monde
The main advantage of trading using opposite Fury Gold and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fury Gold position performs unexpectedly, Nouveau Monde 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 Nouveau Monde will offset losses from the drop in Nouveau Monde's long position.| Fury Gold vs. Vale SA ADR | Fury Gold vs. BHP Group Limited | Fury Gold vs. Glencore PLC ADR | Fury Gold vs. Piedmont Lithium Ltd |
| Nouveau Monde vs. Vale SA ADR | Nouveau Monde vs. BHP Group Limited | Nouveau Monde vs. Glencore PLC ADR | Nouveau Monde vs. Piedmont Lithium Ltd |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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