Correlation Between Forstrong Global and Excelsior Mining

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Can any of the company-specific risk be diversified away by investing in both Forstrong Global and Excelsior 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 Forstrong Global and Excelsior Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and Excelsior Mining Corp, you can compare the effects of market volatilities on Forstrong Global and Excelsior 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 Forstrong Global with a short position of Excelsior Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and Excelsior Mining.

Diversification Opportunities for Forstrong Global and Excelsior Mining

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Forstrong and Excelsior is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and Excelsior Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Mining Corp and Forstrong Global 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 Forstrong Global Income are associated (or correlated) with Excelsior Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Mining Corp has no effect on the direction of Forstrong Global i.e., Forstrong Global and Excelsior Mining go up and down completely randomly.

Pair Corralation between Forstrong Global and Excelsior Mining

Assuming the 90 days trading horizon Forstrong Global Income is expected to under-perform the Excelsior Mining. But the etf apears to be less risky and, when comparing its historical volatility, Forstrong Global Income is 18.08 times less risky than Excelsior Mining. The etf trades about -0.05 of its potential returns per unit of risk. The Excelsior Mining Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Excelsior Mining Corp on October 22, 2024 and sell it today you would earn a total of  2.00  from holding Excelsior Mining Corp or generate 11.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.12%
ValuesDaily Returns

Forstrong Global Income  vs.  Excelsior Mining Corp

 Performance 
       Timeline  
Forstrong Global Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Forstrong Global Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Forstrong Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Excelsior Mining Corp 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Excelsior Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Forstrong Global and Excelsior Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Forstrong Global and Excelsior Mining

The main advantage of trading using opposite Forstrong Global and Excelsior Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, Excelsior 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 Excelsior Mining will offset losses from the drop in Excelsior Mining's long position.
The idea behind Forstrong Global Income and Excelsior 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.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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