Correlation Between Stallion Gold and Foraco International
Can any of the company-specific risk be diversified away by investing in both Stallion Gold and Foraco International 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 Stallion Gold and Foraco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stallion Gold Corp and Foraco International SA, you can compare the effects of market volatilities on Stallion Gold and Foraco International 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 Stallion Gold with a short position of Foraco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stallion Gold and Foraco International.
Diversification Opportunities for Stallion Gold and Foraco International
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stallion and Foraco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Stallion Gold Corp and Foraco International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foraco International and Stallion Gold 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 Stallion Gold Corp are associated (or correlated) with Foraco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foraco International has no effect on the direction of Stallion Gold i.e., Stallion Gold and Foraco International go up and down completely randomly.
Pair Corralation between Stallion Gold and Foraco International
Assuming the 90 days trading horizon Stallion Gold Corp is expected to under-perform the Foraco International. In addition to that, Stallion Gold is 3.53 times more volatile than Foraco International SA. It trades about -0.01 of its total potential returns per unit of risk. Foraco International SA is currently generating about 0.05 per unit of volatility. If you would invest 222.00 in Foraco International SA on September 14, 2024 and sell it today you would earn a total of 5.00 from holding Foraco International SA or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stallion Gold Corp vs. Foraco International SA
Performance |
| Timeline |
| Stallion Gold Corp |
| Foraco International |
Stallion Gold and Foraco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stallion Gold and Foraco International
The main advantage of trading using opposite Stallion Gold and Foraco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stallion Gold position performs unexpectedly, Foraco International 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 Foraco International will offset losses from the drop in Foraco International's long position.| Stallion Gold vs. Foraco International SA | Stallion Gold vs. Geodrill Limited | Stallion Gold vs. Major Drilling Group | Stallion Gold vs. Bri Chem Corp |
| Foraco International vs. Geodrill Limited | Foraco International vs. Major Drilling Group | Foraco International vs. Bri Chem 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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