Correlation Between Fuse Science and Santo Mining

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

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

Diversification Opportunities for Fuse Science and Santo Mining

0.0

Correlation Coefficient

Fuse Science  Santo Mining

Pay attention - limited upside

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

Pair Corralation between Fuse Science and Santo Mining

If you would invest  0.43  in Fuse Science on August 30, 2024 and sell it today you would earn a total of  0.28  from holding Fuse Science or generate 65.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	46.03%
Values	Daily Returns

Fuse Science  vs.  Santo Mining Corp

Fuse Science

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fuse Science are ranked lower than 9 (%) 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.

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.

Pair Trading with Fuse Science and Santo Mining

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

The idea behind Fuse Science and Santo Mining 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.