Correlation Between Finlay Minerals and Highway 50
Can any of the company-specific risk be diversified away by investing in both Finlay Minerals and Highway 50 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 Highway 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finlay Minerals and Highway 50 Gold, you can compare the effects of market volatilities on Finlay Minerals and Highway 50 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 Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finlay Minerals and Highway 50.
Diversification Opportunities for Finlay Minerals and Highway 50
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finlay and Highway is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Finlay Minerals and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold 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 Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Finlay Minerals i.e., Finlay Minerals and Highway 50 go up and down completely randomly.
Pair Corralation between Finlay Minerals and Highway 50
Assuming the 90 days horizon Finlay Minerals is expected to generate 1.68 times more return on investment than Highway 50. However, Finlay Minerals is 1.68 times more volatile than Highway 50 Gold. It trades about 0.07 of its potential returns per unit of risk. Highway 50 Gold is currently generating about 0.07 per unit of risk. If you would invest 2.00 in Finlay Minerals on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Finlay Minerals or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finlay Minerals vs. Highway 50 Gold
Performance |
| Timeline |
| Finlay Minerals |
| Highway 50 Gold |
Finlay Minerals and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finlay Minerals and Highway 50
The main advantage of trading using opposite Finlay Minerals and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finlay Minerals position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50's long position.| Finlay Minerals vs. CMC Metals | Finlay Minerals vs. Tarku Resources | Finlay Minerals vs. Highway 50 Gold |
| Highway 50 vs. First Majestic Silver | Highway 50 vs. Ivanhoe Energy | Highway 50 vs. Orezone Gold Corp | Highway 50 vs. Faraday Copper 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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