Correlation Between Gemfields Group and First Tellurium

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

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

Diversification Opportunities for Gemfields Group and First Tellurium

-0.1

Correlation Coefficient

Gemfields Group  First Tellurium

Good diversification

The 3 months correlation between Gemfields and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group Limited and First Tellurium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tellurium Corp and Gemfields Group 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 Gemfields Group Limited are associated (or correlated) with First Tellurium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tellurium Corp has no effect on the direction of Gemfields Group i.e., Gemfields Group and First Tellurium go up and down completely randomly.

Pair Corralation between Gemfields Group and First Tellurium

Assuming the 90 days horizon Gemfields Group Limited is expected to under-perform the First Tellurium. But the pink sheet apears to be less risky and, when comparing its historical volatility, Gemfields Group Limited is 1.07 times less risky than First Tellurium. The pink sheet trades about -0.13 of its potential returns per unit of risk. The First Tellurium Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  8.50  in First Tellurium Corp on December 27, 2024 and sell it today you would lose (0.40) from holding First Tellurium Corp or give up 4.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Gemfields Group Limited  vs.  First Tellurium Corp

Gemfields Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gemfields Group Limited 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 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.

First Tellurium Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Tellurium Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Gemfields Group and First Tellurium

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

The idea behind Gemfields Group Limited and First Tellurium Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.