Correlation Between GALENA MINING and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both GALENA MINING and Fortescue Metals 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 GALENA MINING and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GALENA MINING LTD and Fortescue Metals Group, you can compare the effects of market volatilities on GALENA MINING and Fortescue Metals 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 GALENA MINING with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and Fortescue Metals.
Diversification Opportunities for GALENA MINING and Fortescue Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GALENA and Fortescue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and GALENA MINING 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 GALENA MINING LTD are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of GALENA MINING i.e., GALENA MINING and Fortescue Metals go up and down completely randomly.
Pair Corralation between GALENA MINING and Fortescue Metals
Assuming the 90 days horizon GALENA MINING LTD is expected to under-perform the Fortescue Metals. In addition to that, GALENA MINING is 3.19 times more volatile than Fortescue Metals Group. It trades about -0.02 of its total potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.02 per unit of volatility. If you would invest 1,062 in Fortescue Metals Group on October 26, 2024 and sell it today you would earn a total of 57.00 from holding Fortescue Metals Group or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
GALENA MINING LTD vs. Fortescue Metals Group
Performance |
| Timeline |
| GALENA MINING LTD |
| Fortescue Metals |
GALENA MINING and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GALENA MINING and Fortescue Metals
The main advantage of trading using opposite GALENA MINING and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GALENA MINING position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| GALENA MINING vs. Rio Tinto Group | GALENA MINING vs. Anglo American plc | GALENA MINING vs. Mineral Resources Limited | GALENA MINING vs. NEXA RESOURCES SA |
| Fortescue Metals vs. SPORTING | Fortescue Metals vs. FANDIFI TECHNOLOGY P | Fortescue Metals vs. DICKS Sporting Goods | Fortescue Metals vs. Vishay Intertechnology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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