Correlation Between Themac Resources and Forum Energy
Can any of the company-specific risk be diversified away by investing in both Themac Resources and Forum Energy 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 Themac Resources and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themac Resources Group and Forum Energy Metals, you can compare the effects of market volatilities on Themac Resources and Forum Energy 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 Themac Resources with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themac Resources and Forum Energy.
Diversification Opportunities for Themac Resources and Forum Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Themac and Forum is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Themac Resources Group and Forum Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Metals and Themac 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 Themac Resources Group are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Metals has no effect on the direction of Themac Resources i.e., Themac Resources and Forum Energy go up and down completely randomly.
Pair Corralation between Themac Resources and Forum Energy
Assuming the 90 days horizon Themac Resources Group is expected to generate 2.49 times more return on investment than Forum Energy. However, Themac Resources is 2.49 times more volatile than Forum Energy Metals. It trades about 0.08 of its potential returns per unit of risk. Forum Energy Metals is currently generating about 0.01 per unit of risk. If you would invest 2.25 in Themac Resources Group on August 25, 2024 and sell it today you would earn a total of 1.95 from holding Themac Resources Group or generate 86.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Themac Resources Group vs. Forum Energy Metals
Performance |
| Timeline |
| Themac Resources |
| Forum Energy Metals |
Themac Resources and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Themac Resources and Forum Energy
The main advantage of trading using opposite Themac Resources and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themac Resources position performs unexpectedly, Forum Energy 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 Forum Energy will offset losses from the drop in Forum Energy's long position.| Themac Resources vs. Ascendant Resources | Themac Resources vs. Cantex Mine Development | Themac Resources vs. Amarc Resources | Themac Resources vs. Sterling Metals Corp |
| Forum Energy vs. Namibia Critical Metals | Forum Energy vs. Themac Resources Group | Forum Energy vs. Pasinex Resources Limited | Forum Energy vs. NGEx Minerals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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