Correlation Between Thesis Gold and Firm Capital

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

By analyzing existing cross correlation between Thesis Gold and Firm Capital Mortgage, you can compare the effects of market volatilities on Thesis Gold and Firm Capital 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 Thesis Gold with a short position of Firm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thesis Gold and Firm Capital.

Diversification Opportunities for Thesis Gold and Firm Capital

0.0

Correlation Coefficient

Thesis Gold  Firm Capital

Pay attention - limited upside

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

Pair Corralation between Thesis Gold and Firm Capital

If you would invest (100.00) in Firm Capital Mortgage on October 4, 2024 and sell it today you would earn a total of  100.00  from holding Firm Capital Mortgage or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Thesis Gold  vs.  Firm Capital Mortgage

Thesis Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thesis Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Thesis Gold is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Firm Capital Mortgage

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Firm Capital Mortgage are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Firm Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Thesis Gold and Firm Capital

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

The idea behind Thesis Gold and Firm Capital Mortgage 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.