Correlation Between NioCorp Developments and Fury Gold

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

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

Diversification Opportunities for NioCorp Developments and Fury Gold

0.54

Correlation Coefficient

NioCorp Developments  Fury Gold

Very weak diversification

The 3 months correlation between NioCorp and Fury is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd 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 NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Fury Gold go up and down completely randomly.

Pair Corralation between NioCorp Developments and Fury Gold

Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Fury Gold. In addition to that, NioCorp Developments is 1.58 times more volatile than Fury Gold Mines. It trades about -0.01 of its total potential returns per unit of risk. Fury Gold Mines is currently generating about 0.01 per unit of volatility. If you would invest  43.00  in Fury Gold Mines on September 13, 2024 and sell it today you would lose (1.00) from holding Fury Gold Mines or give up 2.33% of portfolio value over 90 days.

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

NioCorp Developments Ltd  vs.  Fury Gold Mines

NioCorp Developments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NioCorp Developments Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, NioCorp Developments is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fury Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fury Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fury Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NioCorp Developments and Fury Gold

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

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.