Correlation Between Fury Gold and Wallbridge Mining

Can any of the company-specific risk be diversified away by investing in both Fury Gold and Wallbridge 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 Fury Gold and Wallbridge Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fury Gold Mines and Wallbridge Mining, you can compare the effects of market volatilities on Fury Gold and Wallbridge 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 Fury Gold with a short position of Wallbridge Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fury Gold and Wallbridge Mining.

Diversification Opportunities for Fury Gold and Wallbridge Mining

0.75

Correlation Coefficient

Fury Gold  Wallbridge Mining

Poor diversification

The 3 months correlation between Fury and Wallbridge is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fury Gold Mines and Wallbridge Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbridge Mining and Fury 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 Fury Gold Mines are associated (or correlated) with Wallbridge Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbridge Mining has no effect on the direction of Fury Gold i.e., Fury Gold and Wallbridge Mining go up and down completely randomly.

Pair Corralation between Fury Gold and Wallbridge Mining

Assuming the 90 days trading horizon Fury Gold is expected to generate 2.96 times less return on investment than Wallbridge Mining. But when comparing it to its historical volatility, Fury Gold Mines is 1.49 times less risky than Wallbridge Mining. It trades about 0.15 of its potential returns per unit of risk. Wallbridge Mining is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Wallbridge Mining on January 28, 2024 and sell it today you would earn a total of  4.00  from holding Wallbridge Mining or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Fury Gold Mines  vs.  Wallbridge Mining

Fury Gold Mines

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fury Gold Mines are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Fury Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Wallbridge Mining

Risk-Adjusted Performance

7 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wallbridge Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Wallbridge Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fury Gold and Wallbridge Mining

The main advantage of trading using opposite Fury Gold and Wallbridge Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fury Gold position performs unexpectedly, Wallbridge 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 Wallbridge Mining will offset losses from the drop in Wallbridge Mining's long position.

The idea behind Fury Gold Mines and Wallbridge Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..