Correlation Between Forsys Metals and FirstGroup Plc

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

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

Diversification Opportunities for Forsys Metals and FirstGroup Plc

0.0

Correlation Coefficient

Forsys Metals  FirstGroup Plc

Pay attention - limited upside

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

Pair Corralation between Forsys Metals and FirstGroup Plc

If you would invest  37.00  in Forsys Metals Corp on December 22, 2024 and sell it today you would lose (3.00) from holding Forsys Metals Corp or give up 8.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Forsys Metals Corp  vs.  FirstGroup plc

Forsys Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Forsys Metals Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Forsys Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FirstGroup plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstGroup plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, FirstGroup Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Forsys Metals and FirstGroup Plc

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

The idea behind Forsys Metals Corp and FirstGroup plc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.