Correlation Between Skeena Resources and Foran Mining
Can any of the company-specific risk be diversified away by investing in both Skeena Resources and Foran 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 Skeena Resources and Foran Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skeena Resources and Foran Mining, you can compare the effects of market volatilities on Skeena Resources and Foran 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 Skeena Resources with a short position of Foran Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skeena Resources and Foran Mining.
Diversification Opportunities for Skeena Resources and Foran Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Skeena and Foran is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Skeena Resources and Foran Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foran Mining and Skeena 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 Skeena Resources are associated (or correlated) with Foran Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foran Mining has no effect on the direction of Skeena Resources i.e., Skeena Resources and Foran Mining go up and down completely randomly.
Pair Corralation between Skeena Resources and Foran Mining
Assuming the 90 days trading horizon Skeena Resources is expected to generate 1.93 times more return on investment than Foran Mining. However, Skeena Resources is 1.93 times more volatile than Foran Mining. It trades about -0.07 of its potential returns per unit of risk. Foran Mining is currently generating about -0.19 per unit of risk. If you would invest 1,396 in Skeena Resources on August 30, 2024 and sell it today you would lose (99.00) from holding Skeena Resources or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skeena Resources vs. Foran Mining
Performance |
| Timeline |
| Skeena Resources |
| Foran Mining |
Skeena Resources and Foran Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skeena Resources and Foran Mining
The main advantage of trading using opposite Skeena Resources and Foran Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skeena Resources position performs unexpectedly, Foran 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 Foran Mining will offset losses from the drop in Foran Mining's long position.| Skeena Resources vs. First Majestic Silver | Skeena Resources vs. Ivanhoe Energy | Skeena Resources vs. Orezone Gold Corp | Skeena Resources vs. Faraday Copper Corp |
| Foran Mining vs. First Majestic Silver | Foran Mining vs. Ivanhoe Energy | Foran Mining vs. Orezone Gold Corp | Foran Mining vs. Faraday Copper Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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