Correlation Between NioCorp Developments and Fury Gold

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

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

Diversification Opportunities for NioCorp Developments and Fury Gold

0.51

Correlation Coefficient

NioCorp Developments  Fury Gold

Very weak diversification

The 3 months correlation between NioCorp and Fury is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Fury Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fury Gold Mines and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Fury Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fury Gold Mines has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Fury Gold go up and down completely randomly.

Pair Corralation between NioCorp Developments and Fury Gold

Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 1.76 times more return on investment than Fury Gold. However, NioCorp Developments is 1.76 times more volatile than Fury Gold Mines. It trades about 0.17 of its potential returns per unit of risk. Fury Gold Mines is currently generating about 0.06 per unit of risk. If you would invest  141.00  in NioCorp Developments Ltd on December 27, 2024 and sell it today you would earn a total of  89.00  from holding NioCorp Developments Ltd or generate 63.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

NioCorp Developments Ltd  vs.  Fury Gold Mines

NioCorp Developments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NioCorp Developments Ltd are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, NioCorp Developments sustained solid returns over the last few months and may actually be approaching a breakup point.

Fury Gold Mines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fury Gold Mines are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Fury Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NioCorp Developments and Fury Gold

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

The idea behind NioCorp Developments Ltd and Fury Gold Mines 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.