Correlation Between Filo Mining and Cobalt Blue

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

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

Diversification Opportunities for Filo Mining and Cobalt Blue

0.18

Correlation Coefficient

Filo Mining  Cobalt Blue

Average diversification

The 3 months correlation between Filo and Cobalt is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Filo Mining Corp and Cobalt Blue Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobalt Blue Holdings and Filo Mining 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 Filo Mining Corp are associated (or correlated) with Cobalt Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobalt Blue Holdings has no effect on the direction of Filo Mining i.e., Filo Mining and Cobalt Blue go up and down completely randomly.

Pair Corralation between Filo Mining and Cobalt Blue

Assuming the 90 days horizon Filo Mining Corp is expected to generate 0.08 times more return on investment than Cobalt Blue. However, Filo Mining Corp is 12.39 times less risky than Cobalt Blue. It trades about 0.03 of its potential returns per unit of risk. Cobalt Blue Holdings is currently generating about -0.01 per unit of risk. If you would invest  2,268  in Filo Mining Corp on September 3, 2024 and sell it today you would earn a total of  37.00  from holding Filo Mining Corp or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Filo Mining Corp  vs.  Cobalt Blue Holdings

Filo Mining Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Filo Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Filo Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cobalt Blue Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cobalt Blue Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Cobalt Blue is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Filo Mining and Cobalt Blue

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

The idea behind Filo Mining Corp and Cobalt Blue Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.