Correlation Between Faction Investment and Galore Resources

Can any of the company-specific risk be diversified away by investing in both Faction Investment and Galore Resources 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 Faction Investment and Galore Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Faction Investment Group and Galore Resources, you can compare the effects of market volatilities on Faction Investment and Galore Resources 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 Faction Investment with a short position of Galore Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faction Investment and Galore Resources.

Diversification Opportunities for Faction Investment and Galore Resources

0.0

Correlation Coefficient

Faction Investment  Galore Resources

Pay attention - limited upside

The 3 months correlation between Faction and Galore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and Galore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galore Resources and Faction Investment 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 Faction Investment Group are associated (or correlated) with Galore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galore Resources has no effect on the direction of Faction Investment i.e., Faction Investment and Galore Resources go up and down completely randomly.

Pair Corralation between Faction Investment and Galore Resources

If you would invest  2.00  in Galore Resources on September 27, 2024 and sell it today you would lose (1.00) from holding Galore Resources or give up 50.0% of portfolio value over 90 days.

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

Faction Investment Group  vs.  Galore Resources

Faction Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Faction Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Faction Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Galore Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Galore Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Galore Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Faction Investment and Galore Resources

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

The idea behind Faction Investment Group and Galore 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.