Correlation Between Sigma Lithium and Fury Gold
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium 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 Sigma Lithium and Fury Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sigma Lithium Resources and Fury Gold Mines, you can compare the effects of market volatilities on Sigma Lithium 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 Sigma Lithium with a short position of Fury Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Fury Gold.
Diversification Opportunities for Sigma Lithium and Fury Gold
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sigma and Fury is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources 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 Sigma Lithium 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 Sigma Lithium Resources 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 Sigma Lithium i.e., Sigma Lithium and Fury Gold go up and down completely randomly.
Pair Corralation between Sigma Lithium and Fury Gold
Given the investment horizon of 90 days Sigma Lithium Resources is expected to generate 1.51 times more return on investment than Fury Gold. However, Sigma Lithium is 1.51 times more volatile than Fury Gold Mines. It trades about 0.13 of its potential returns per unit of risk. Fury Gold Mines is currently generating about 0.01 per unit of risk. If you would invest 1,117 in Sigma Lithium Resources on October 22, 2024 and sell it today you would earn a total of 84.00 from holding Sigma Lithium Resources or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sigma Lithium Resources vs. Fury Gold Mines
Performance |
| Timeline |
| Sigma Lithium Resources |
| Fury Gold Mines |
Sigma Lithium and Fury Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sigma Lithium and Fury Gold
The main advantage of trading using opposite Sigma Lithium and Fury Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium 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.| Sigma Lithium vs. Piedmont Lithium Ltd | Sigma Lithium vs. Standard Lithium | Sigma Lithium vs. MP Materials Corp | Sigma Lithium vs. Vale SA ADR |
| Fury Gold vs. EMX Royalty Corp | Fury Gold vs. Western Copper and | Fury Gold vs. Nevada King Gold | Fury Gold vs. Aftermath Silver |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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