Correlation Between Adventus Mining and Forum Energy

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

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

Diversification Opportunities for Adventus Mining and Forum Energy

0.0

Correlation Coefficient

Adventus Mining  Forum Energy

Pay attention - limited upside

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

Pair Corralation between Adventus Mining and Forum Energy

If you would invest  4.00  in Forum Energy Metals on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Forum Energy Metals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Adventus Mining  vs.  Forum Energy Metals

Adventus Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adventus Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Adventus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Forum Energy Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Forum Energy Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Forum Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adventus Mining and Forum Energy

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

The idea behind Adventus Mining and Forum Energy Metals 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.