Correlation Between Finlay Minerals and Mountain Boy
Can any of the company-specific risk be diversified away by investing in both Finlay Minerals and Mountain Boy 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 Mountain Boy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finlay Minerals and Mountain Boy Minerals, you can compare the effects of market volatilities on Finlay Minerals and Mountain Boy 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 Mountain Boy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finlay Minerals and Mountain Boy.
Diversification Opportunities for Finlay Minerals and Mountain Boy
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Finlay and Mountain is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Finlay Minerals and Mountain Boy Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Boy 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 Mountain Boy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Boy Minerals has no effect on the direction of Finlay Minerals i.e., Finlay Minerals and Mountain Boy go up and down completely randomly.
Pair Corralation between Finlay Minerals and Mountain Boy
Assuming the 90 days horizon Finlay Minerals is expected to under-perform the Mountain Boy. But the stock apears to be less risky and, when comparing its historical volatility, Finlay Minerals is 1.35 times less risky than Mountain Boy. The stock trades about -0.09 of its potential returns per unit of risk. The Mountain Boy Minerals is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Mountain Boy Minerals on September 13, 2024 and sell it today you would lose (1.50) from holding Mountain Boy Minerals or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finlay Minerals vs. Mountain Boy Minerals
Performance |
| Timeline |
| Finlay Minerals |
| Mountain Boy Minerals |
Finlay Minerals and Mountain Boy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finlay Minerals and Mountain Boy
The main advantage of trading using opposite Finlay Minerals and Mountain Boy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finlay Minerals position performs unexpectedly, Mountain Boy 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 Mountain Boy will offset losses from the drop in Mountain Boy's long position.| Finlay Minerals vs. CMC Metals | Finlay Minerals vs. Tarku Resources | Finlay Minerals vs. Highway 50 Gold |
| Mountain Boy vs. Stroud Resources | Mountain Boy vs. iMetal Resources | Mountain Boy vs. Trigon Metals | Mountain Boy vs. Decade 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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