Correlation Between Thule Group and Filo Mining

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

By analyzing existing cross correlation between Thule Group AB and Filo Mining Corp, you can compare the effects of market volatilities on Thule Group and Filo 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 Thule Group with a short position of Filo Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thule Group and Filo Mining.

Diversification Opportunities for Thule Group and Filo Mining

0.77

Correlation Coefficient

Thule Group  Filo Mining

Poor diversification

The 3 months correlation between Thule and Filo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Thule Group AB and Filo Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filo Mining Corp and Thule Group 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 Thule Group AB are associated (or correlated) with Filo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filo Mining Corp has no effect on the direction of Thule Group i.e., Thule Group and Filo Mining go up and down completely randomly.

Pair Corralation between Thule Group and Filo Mining

Assuming the 90 days trading horizon Thule Group is expected to generate 2.12 times less return on investment than Filo Mining. But when comparing it to its historical volatility, Thule Group AB is 1.46 times less risky than Filo Mining. It trades about 0.12 of its potential returns per unit of risk. Filo Mining Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  16,300  in Filo Mining Corp on February 25, 2024 and sell it today you would earn a total of  4,200  from holding Filo Mining Corp or generate 25.77% return on investment over 90 days.

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

Thule Group AB  vs.  Filo Mining Corp

Thule Group AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thule Group AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Thule Group may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Filo Mining Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Filo Mining Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Filo Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thule Group and Filo Mining

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

The idea behind Thule Group AB and Filo Mining Corp 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.