Correlation Between First Tellurium and Diamond Fields

Can any of the company-specific risk be diversified away by investing in both First Tellurium and Diamond Fields 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 First Tellurium and Diamond Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Tellurium Corp and Diamond Fields Resources, you can compare the effects of market volatilities on First Tellurium and Diamond Fields 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 First Tellurium with a short position of Diamond Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Tellurium and Diamond Fields.

Diversification Opportunities for First Tellurium and Diamond Fields

-0.18

Correlation Coefficient

First Tellurium  Diamond Fields

Good diversification

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

Pair Corralation between First Tellurium and Diamond Fields

Assuming the 90 days horizon First Tellurium Corp is expected to generate 0.89 times more return on investment than Diamond Fields. However, First Tellurium Corp is 1.12 times less risky than Diamond Fields. It trades about 0.0 of its potential returns per unit of risk. Diamond Fields Resources is currently generating about -0.04 per unit of risk. If you would invest  8.86  in First Tellurium Corp on December 26, 2024 and sell it today you would lose (0.76) from holding First Tellurium Corp or give up 8.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

First Tellurium Corp  vs.  Diamond Fields Resources

First Tellurium Corp

Risk-Adjusted Performance

Very Weak

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

Diamond Fields Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Diamond Fields Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with First Tellurium and Diamond Fields

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

The idea behind First Tellurium Corp and Diamond Fields 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.