Correlation Between Wallbridge Mining and First Mining
Can any of the company-specific risk be diversified away by investing in both Wallbridge Mining and First 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 Wallbridge Mining and First Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallbridge Mining and First Mining Gold, you can compare the effects of market volatilities on Wallbridge Mining and First 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 Wallbridge Mining with a short position of First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallbridge Mining and First Mining.
Diversification Opportunities for Wallbridge Mining and First Mining
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wallbridge and First is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Wallbridge Mining and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and Wallbridge Mining 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 Wallbridge Mining are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Wallbridge Mining i.e., Wallbridge Mining and First Mining go up and down completely randomly.
Pair Corralation between Wallbridge Mining and First Mining
Assuming the 90 days horizon Wallbridge Mining is expected to generate 9.19 times less return on investment than First Mining. But when comparing it to its historical volatility, Wallbridge Mining is 1.6 times less risky than First Mining. It trades about 0.02 of its potential returns per unit of risk. First Mining Gold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3.77 in First Mining Gold on November 2, 2024 and sell it today you would earn a total of 9.23 from holding First Mining Gold or generate 244.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallbridge Mining vs. First Mining Gold
Performance |
| Timeline |
| Wallbridge Mining |
| First Mining Gold |
Wallbridge Mining and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallbridge Mining and First Mining
The main advantage of trading using opposite Wallbridge Mining and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallbridge Mining position performs unexpectedly, First 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 First Mining will offset losses from the drop in First Mining's long position.| Wallbridge Mining vs. Jaguar Mining | Wallbridge Mining vs. Amex Exploration | Wallbridge Mining vs. Lion One Metals |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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