Correlation Between Foran Mining and Plaza Retail

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

Diversification Opportunities for Foran Mining and Plaza Retail

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Foran and Plaza is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Foran Mining and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT and Foran 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 Foran Mining are associated (or correlated) with Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Foran Mining i.e., Foran Mining and Plaza Retail go up and down completely randomly.

Pair Corralation between Foran Mining and Plaza Retail

Assuming the 90 days trading horizon Foran Mining is expected to under-perform the Plaza Retail. In addition to that, Foran Mining is 2.74 times more volatile than Plaza Retail REIT. It trades about -0.15 of its total potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.11 per unit of volatility. If you would invest  381.00  in Plaza Retail REIT on October 26, 2024 and sell it today you would lose (21.00) from holding Plaza Retail REIT or give up 5.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.39%
ValuesDaily Returns

Foran Mining  vs.  Plaza Retail REIT

 Performance 
       Timeline  
Foran Mining 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Foran Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Plaza Retail REIT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Plaza Retail REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Plaza Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Foran Mining and Plaza Retail Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Foran Mining and Plaza Retail

The main advantage of trading using opposite Foran Mining and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foran Mining position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.
The idea behind Foran Mining and Plaza Retail REIT 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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