Correlation Between Finlay Minerals and GMV Minerals
Can any of the company-specific risk be diversified away by investing in both Finlay Minerals and GMV Minerals 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 GMV Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finlay Minerals and GMV Minerals, you can compare the effects of market volatilities on Finlay Minerals and GMV Minerals 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 GMV Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finlay Minerals and GMV Minerals.
Diversification Opportunities for Finlay Minerals and GMV Minerals
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finlay and GMV is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Finlay Minerals and GMV Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMV Minerals 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 GMV Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMV Minerals has no effect on the direction of Finlay Minerals i.e., Finlay Minerals and GMV Minerals go up and down completely randomly.
Pair Corralation between Finlay Minerals and GMV Minerals
Assuming the 90 days horizon Finlay Minerals is expected to generate 1.87 times more return on investment than GMV Minerals. However, Finlay Minerals is 1.87 times more volatile than GMV Minerals. It trades about 0.21 of its potential returns per unit of risk. GMV Minerals is currently generating about -0.11 per unit of risk. If you would invest 8.00 in Finlay Minerals on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Finlay Minerals or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finlay Minerals vs. GMV Minerals
Performance |
| Timeline |
| Finlay Minerals |
| GMV Minerals |
Finlay Minerals and GMV Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finlay Minerals and GMV Minerals
The main advantage of trading using opposite Finlay Minerals and GMV Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finlay Minerals position performs unexpectedly, GMV Minerals 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 GMV Minerals will offset losses from the drop in GMV Minerals' long position.| Finlay Minerals vs. CMC Metals | Finlay Minerals vs. Tarku Resources | Finlay Minerals vs. Highway 50 Gold |
| GMV Minerals vs. Altamira Gold Corp | GMV Minerals vs. Tarku Resources | GMV Minerals vs. Finlay Minerals | GMV Minerals vs. Adamera Minerals Corp |
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.
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