Correlation Between FC Investment and Thor Mining

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

By analyzing existing cross correlation between FC Investment Trust and Thor Mining PLC, you can compare the effects of market volatilities on FC Investment and Thor 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 FC Investment with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Thor Mining.

Diversification Opportunities for FC Investment and Thor Mining

-0.43

Correlation Coefficient

FC Investment  Thor Mining

Very good diversification

The 3 months correlation between FCIT and Thor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and FC Investment 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 FC Investment Trust are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of FC Investment i.e., FC Investment and Thor Mining go up and down completely randomly.

Pair Corralation between FC Investment and Thor Mining

Assuming the 90 days trading horizon FC Investment is expected to generate 23.31 times less return on investment than Thor Mining. But when comparing it to its historical volatility, FC Investment Trust is 5.78 times less risky than Thor Mining. It trades about 0.03 of its potential returns per unit of risk. Thor Mining PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  65.00  in Thor Mining PLC on October 11, 2024 and sell it today you would earn a total of  5.00  from holding Thor Mining PLC or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

FC Investment Trust  vs.  Thor Mining PLC

FC Investment Trust

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FC Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Thor Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thor Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Thor Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FC Investment and Thor Mining

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

The idea behind FC Investment Trust and Thor Mining 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.