Correlation Between Finlay Minerals and Thor Explorations
Can any of the company-specific risk be diversified away by investing in both Finlay Minerals and Thor Explorations 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 Thor Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finlay Minerals and Thor Explorations, you can compare the effects of market volatilities on Finlay Minerals and Thor Explorations 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 Thor Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finlay Minerals and Thor Explorations.
Diversification Opportunities for Finlay Minerals and Thor Explorations
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Finlay and Thor is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Finlay Minerals and Thor Explorations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Explorations 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 Thor Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Explorations has no effect on the direction of Finlay Minerals i.e., Finlay Minerals and Thor Explorations go up and down completely randomly.
Pair Corralation between Finlay Minerals and Thor Explorations
Assuming the 90 days horizon Finlay Minerals is expected to generate 3.83 times more return on investment than Thor Explorations. However, Finlay Minerals is 3.83 times more volatile than Thor Explorations. It trades about 0.04 of its potential returns per unit of risk. Thor Explorations is currently generating about 0.03 per unit of risk. If you would invest 10.00 in Finlay Minerals on August 25, 2024 and sell it today you would lose (7.00) from holding Finlay Minerals or give up 70.0% 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. Thor Explorations
Performance |
| Timeline |
| Finlay Minerals |
| Thor Explorations |
Finlay Minerals and Thor Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finlay Minerals and Thor Explorations
The main advantage of trading using opposite Finlay Minerals and Thor Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finlay Minerals position performs unexpectedly, Thor Explorations 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 Thor Explorations will offset losses from the drop in Thor Explorations' long position.| Finlay Minerals vs. CMC Metals | Finlay Minerals vs. Tarku Resources | Finlay Minerals vs. Highway 50 Gold |
| Thor Explorations vs. First Majestic Silver | Thor Explorations vs. Ivanhoe Energy | Thor Explorations vs. Orezone Gold Corp | Thor Explorations 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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