Correlation Between Vale SA and Fury Gold
Can any of the company-specific risk be diversified away by investing in both Vale SA 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 Vale SA and Fury Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vale SA ADR and Fury Gold Mines, you can compare the effects of market volatilities on Vale SA 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 Vale SA with a short position of Fury Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vale SA and Fury Gold.
Diversification Opportunities for Vale SA and Fury Gold
Very weak diversification
The 3 months correlation between Vale and Fury is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA ADR 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 Vale SA 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 Vale SA ADR 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 Vale SA i.e., Vale SA and Fury Gold go up and down completely randomly.
Pair Corralation between Vale SA and Fury Gold
Given the investment horizon of 90 days Vale SA ADR is expected to under-perform the Fury Gold. But the stock apears to be less risky and, when comparing its historical volatility, Vale SA ADR is 2.68 times less risky than Fury Gold. The stock trades about -0.07 of its potential returns per unit of risk. The Fury Gold Mines is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 53.00 in Fury Gold Mines on August 29, 2024 and sell it today you would lose (12.00) from holding Fury Gold Mines or give up 22.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vale SA ADR vs. Fury Gold Mines
Performance |
| Timeline |
| Vale SA ADR |
| Fury Gold Mines |
Vale SA and Fury Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vale SA and Fury Gold
The main advantage of trading using opposite Vale SA and Fury Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA 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.| Vale SA vs. BHP Group Limited | Vale SA vs. Teck Resources Ltd | Vale SA vs. Lithium Americas Corp | Vale SA vs. MP Materials Corp |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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