Correlation Between Hummingbird Resources and First Mining
Can any of the company-specific risk be diversified away by investing in both Hummingbird Resources and First Mining 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 Hummingbird Resources and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hummingbird Resources PLC and First Mining Gold, you can compare the effects of market volatilities on Hummingbird Resources and First Mining 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 Hummingbird Resources with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hummingbird Resources and First Mining.
Diversification Opportunities for Hummingbird Resources and First Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hummingbird and First is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hummingbird Resources PLC and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and Hummingbird Resources 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 Hummingbird Resources PLC are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Hummingbird Resources i.e., Hummingbird Resources and First Mining go up and down completely randomly.
Pair Corralation between Hummingbird Resources and First Mining
Assuming the 90 days horizon Hummingbird Resources PLC is expected to under-perform the First Mining. In addition to that, Hummingbird Resources is 3.83 times more volatile than First Mining Gold. It trades about -0.23 of its total potential returns per unit of risk. First Mining Gold is currently generating about -0.13 per unit of volatility. If you would invest 11.00 in First Mining Gold on September 1, 2024 and sell it today you would lose (1.60) from holding First Mining Gold or give up 14.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hummingbird Resources PLC vs. First Mining Gold
Performance |
| Timeline |
| Hummingbird Resources PLC |
| First Mining Gold |
Hummingbird Resources and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hummingbird Resources and First Mining
The main advantage of trading using opposite Hummingbird Resources and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hummingbird Resources position performs unexpectedly, First Mining 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 First Mining will offset losses from the drop in First Mining's long position.| Hummingbird Resources vs. Fremont Gold | Hummingbird Resources vs. Norsemont Mining | Hummingbird Resources vs. Tudor Gold Corp | Hummingbird Resources vs. Japan Gold Corp |
| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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