Correlation Between Emera Maine and Forsys Metals

Can any of the company-specific risk be diversified away by investing in both Emera Maine and Forsys Metals 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 Emera Maine and Forsys Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Emera Maine PFD and Forsys Metals Corp, you can compare the effects of market volatilities on Emera Maine and Forsys Metals 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 Emera Maine with a short position of Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emera Maine and Forsys Metals.

Diversification Opportunities for Emera Maine and Forsys Metals

-0.67

Correlation Coefficient

Emera Maine  Forsys Metals

Excellent diversification

The 3 months correlation between Emera and Forsys is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Emera Maine PFD and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals Corp and Emera Maine 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 Emera Maine PFD are associated (or correlated) with Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Emera Maine i.e., Emera Maine and Forsys Metals go up and down completely randomly.

Pair Corralation between Emera Maine and Forsys Metals

If you would invest  9,825  in Emera Maine PFD on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Emera Maine PFD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Emera Maine PFD  vs.  Forsys Metals Corp

Emera Maine PFD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emera Maine PFD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Emera Maine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Forsys Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forsys Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Emera Maine and Forsys Metals

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

The idea behind Emera Maine PFD and Forsys Metals Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.