Correlation Between Eskay Mining and Fury Gold

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

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

Diversification Opportunities for Eskay Mining and Fury Gold

0.17

Correlation Coefficient

Eskay Mining  Fury Gold

Average diversification

The 3 months correlation between Eskay and Fury is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp 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 Eskay 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 Eskay Mining Corp 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 Eskay Mining i.e., Eskay Mining and Fury Gold go up and down completely randomly.

Pair Corralation between Eskay Mining and Fury Gold

Assuming the 90 days horizon Eskay Mining is expected to generate 1.4 times less return on investment than Fury Gold. In addition to that, Eskay Mining is 1.6 times more volatile than Fury Gold Mines. It trades about 0.03 of its total potential returns per unit of risk. Fury Gold Mines is currently generating about 0.06 per unit of volatility. If you would invest  39.00  in Fury Gold Mines on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Fury Gold Mines or generate 10.26% return on investment over 90 days.

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

Eskay Mining Corp  vs.  Fury Gold Mines

Eskay Mining Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eskay Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Eskay Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fury Gold Mines

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fury Gold Mines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Fury Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eskay Mining and Fury Gold

The main advantage of trading using opposite Eskay Mining and Fury Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining 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.

The idea behind Eskay Mining Corp and Fury Gold Mines 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.