Correlation Between Metals X and Fury Gold
Can any of the company-specific risk be diversified away by investing in both Metals X and Fury Gold 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 Metals X and Fury Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals X Limited and Fury Gold Mines, you can compare the effects of market volatilities on Metals X and Fury Gold 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 Metals X with a short position of Fury Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals X and Fury Gold.
Diversification Opportunities for Metals X and Fury Gold
Very weak diversification
The 3 months correlation between Metals and Fury is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Metals X Limited and Fury Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fury Gold Mines and Metals X 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 Metals X Limited are associated (or correlated) with Fury Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fury Gold Mines has no effect on the direction of Metals X i.e., Metals X and Fury Gold go up and down completely randomly.
Pair Corralation between Metals X and Fury Gold
Assuming the 90 days horizon Metals X Limited is expected to generate 1.55 times more return on investment than Fury Gold. However, Metals X is 1.55 times more volatile than Fury Gold Mines. It trades about 0.04 of its potential returns per unit of risk. Fury Gold Mines is currently generating about 0.03 per unit of risk. If you would invest 21.00 in Metals X Limited on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Metals X Limited or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals X Limited vs. Fury Gold Mines
Performance |
| Timeline |
| Metals X Limited |
| Fury Gold Mines |
Metals X and Fury Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals X and Fury Gold
The main advantage of trading using opposite Metals X and Fury Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals X position performs unexpectedly, Fury Gold 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 Fury Gold will offset losses from the drop in Fury Gold's long position.The idea behind Metals X Limited and Fury Gold Mines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fury Gold vs. Teck Resources Ltd | Fury Gold vs. Sigma Lithium Resources | Fury Gold vs. Vale SA ADR | Fury Gold vs. Sayona Mining Limited |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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