Correlation Between Finlay Minerals and Decade Resources
Can any of the company-specific risk be diversified away by investing in both Finlay Minerals and Decade 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 Finlay Minerals and Decade Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finlay Minerals and Decade Resources, you can compare the effects of market volatilities on Finlay Minerals and Decade 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 Finlay Minerals with a short position of Decade Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finlay Minerals and Decade Resources.
Diversification Opportunities for Finlay Minerals and Decade Resources
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Finlay and Decade is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Finlay Minerals and Decade Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decade Resources and Finlay Minerals 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 Finlay Minerals are associated (or correlated) with Decade Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decade Resources has no effect on the direction of Finlay Minerals i.e., Finlay Minerals and Decade Resources go up and down completely randomly.
Pair Corralation between Finlay Minerals and Decade Resources
Assuming the 90 days horizon Finlay Minerals is expected to under-perform the Decade Resources. But the stock apears to be less risky and, when comparing its historical volatility, Finlay Minerals is 1.21 times less risky than Decade Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Decade Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Decade Resources on September 14, 2024 and sell it today you would lose (1.50) from holding Decade Resources or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finlay Minerals vs. Decade Resources
Performance |
| Timeline |
| Finlay Minerals |
| Decade Resources |
Finlay Minerals and Decade Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finlay Minerals and Decade Resources
The main advantage of trading using opposite Finlay Minerals and Decade Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finlay Minerals position performs unexpectedly, Decade 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 Decade Resources will offset losses from the drop in Decade Resources' long position.| Finlay Minerals vs. CMC Metals | Finlay Minerals vs. Tarku Resources | Finlay Minerals vs. Highway 50 Gold |
| Decade Resources vs. Mountain Boy Minerals | Decade Resources vs. Sego Resources | Decade Resources vs. Finlay Minerals | Decade Resources vs. Tarku 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |