Correlation Between Freeport McMoRan and ELEMENT 29

Can any of the company-specific risk be diversified away by investing in both Freeport McMoRan and ELEMENT 29 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 Freeport McMoRan and ELEMENT 29 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Freeport McMoRan and ELEMENT 29 RESOURCES, you can compare the effects of market volatilities on Freeport McMoRan and ELEMENT 29 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 Freeport McMoRan with a short position of ELEMENT 29. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoRan and ELEMENT 29.

Diversification Opportunities for Freeport McMoRan and ELEMENT 29

0.0

Correlation Coefficient

Freeport McMoRan  ELEMENT 29

Pay attention - limited upside

The 3 months correlation between Freeport and ELEMENT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan and ELEMENT 29 RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT 29 RESOURCES and Freeport McMoRan 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 Freeport McMoRan are associated (or correlated) with ELEMENT 29. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT 29 RESOURCES has no effect on the direction of Freeport McMoRan i.e., Freeport McMoRan and ELEMENT 29 go up and down completely randomly.

Pair Corralation between Freeport McMoRan and ELEMENT 29

If you would invest (100.00) in ELEMENT 29 RESOURCES on October 23, 2024 and sell it today you would earn a total of  100.00  from holding ELEMENT 29 RESOURCES or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Freeport McMoRan  vs.  ELEMENT 29 RESOURCES

Freeport McMoRan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freeport McMoRan has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ELEMENT 29 RESOURCES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ELEMENT 29 RESOURCES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ELEMENT 29 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Freeport McMoRan and ELEMENT 29

The main advantage of trading using opposite Freeport McMoRan and ELEMENT 29 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoRan position performs unexpectedly, ELEMENT 29 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 ELEMENT 29 will offset losses from the drop in ELEMENT 29's long position.

The idea behind Freeport McMoRan and ELEMENT 29 RESOURCES 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.