Correlation Between Fathom Nickel and Stone Gold

Can any of the company-specific risk be diversified away by investing in both Fathom Nickel and Stone Gold 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 Fathom Nickel and Stone Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fathom Nickel and Stone Gold, you can compare the effects of market volatilities on Fathom Nickel and Stone Gold 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 Fathom Nickel with a short position of Stone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fathom Nickel and Stone Gold.

Diversification Opportunities for Fathom Nickel and Stone Gold

0.0

Correlation Coefficient

Fathom Nickel  Stone Gold

Pay attention - limited upside

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

Pair Corralation between Fathom Nickel and Stone Gold

If you would invest  1.96  in Fathom Nickel on December 29, 2024 and sell it today you would lose (0.20) from holding Fathom Nickel or give up 10.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Fathom Nickel  vs.  Stone Gold

Fathom Nickel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fathom Nickel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Fathom Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Stone Gold

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Fathom Nickel and Stone Gold

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

The idea behind Fathom Nickel and Stone Gold 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.