Correlation Between Santo Mining and Fuse Science

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

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

Diversification Opportunities for Santo Mining and Fuse Science

0.0

Correlation Coefficient

Santo Mining  Fuse Science

Pay attention - limited upside

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

Pair Corralation between Santo Mining and Fuse Science

If you would invest  0.49  in Fuse Science on September 1, 2024 and sell it today you would earn a total of  0.11  from holding Fuse Science or generate 22.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	44.44%
Values	Daily Returns

Santo Mining Corp  vs.  Fuse Science

Santo Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santo Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Santo Mining is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Fuse Science

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fuse Science are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fuse Science reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Santo Mining and Fuse Science

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

The idea behind Santo Mining Corp and Fuse Science 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.