Correlation Between Faraday Copper and Silver Grail

Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Silver Grail 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 Faraday Copper and Silver Grail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Faraday Copper Corp and Silver Grail Resources, you can compare the effects of market volatilities on Faraday Copper and Silver Grail 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 Faraday Copper with a short position of Silver Grail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Silver Grail.

Diversification Opportunities for Faraday Copper and Silver Grail

-0.71

Correlation Coefficient

Faraday Copper  Silver Grail

Pay attention - limited upside

The 3 months correlation between Faraday and Silver is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Silver Grail Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Grail Resources and Faraday Copper 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 Faraday Copper Corp are associated (or correlated) with Silver Grail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Grail Resources has no effect on the direction of Faraday Copper i.e., Faraday Copper and Silver Grail go up and down completely randomly.

Pair Corralation between Faraday Copper and Silver Grail

Assuming the 90 days trading horizon Faraday Copper Corp is expected to under-perform the Silver Grail. But the stock apears to be less risky and, when comparing its historical volatility, Faraday Copper Corp is 2.15 times less risky than Silver Grail. The stock trades about -0.27 of its potential returns per unit of risk. The Silver Grail Resources is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  9.00  in Silver Grail Resources on September 5, 2024 and sell it today you would lose (1.00) from holding Silver Grail Resources or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Faraday Copper Corp  vs.  Silver Grail Resources

Faraday Copper Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Faraday Copper Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Faraday Copper is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Silver Grail Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Grail Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Faraday Copper and Silver Grail

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

The idea behind Faraday Copper Corp and Silver Grail Resources 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.