Correlation Between Truscott Mining and FireFly Metals

Can any of the company-specific risk be diversified away by investing in both Truscott Mining and FireFly Metals 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 Truscott Mining and FireFly Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Truscott Mining Corp and FireFly Metals, you can compare the effects of market volatilities on Truscott Mining and FireFly Metals 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 Truscott Mining with a short position of FireFly Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truscott Mining and FireFly Metals.

Diversification Opportunities for Truscott Mining and FireFly Metals

-0.13

Correlation Coefficient

Truscott Mining  FireFly Metals

Good diversification

The 3 months correlation between Truscott and FireFly is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Truscott Mining Corp and FireFly Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FireFly Metals and Truscott Mining 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 Truscott Mining Corp are associated (or correlated) with FireFly Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FireFly Metals has no effect on the direction of Truscott Mining i.e., Truscott Mining and FireFly Metals go up and down completely randomly.

Pair Corralation between Truscott Mining and FireFly Metals

Assuming the 90 days trading horizon Truscott Mining is expected to generate 1.58 times less return on investment than FireFly Metals. But when comparing it to its historical volatility, Truscott Mining Corp is 1.06 times less risky than FireFly Metals. It trades about 0.02 of its potential returns per unit of risk. FireFly Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  81.00  in FireFly Metals on October 24, 2024 and sell it today you would earn a total of  17.00  from holding FireFly Metals or generate 20.99% return on investment over 90 days.

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

Truscott Mining Corp  vs.  FireFly Metals

Truscott Mining Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Truscott Mining Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Truscott Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FireFly Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FireFly Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, FireFly Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Truscott Mining and FireFly Metals

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

The idea behind Truscott Mining Corp and FireFly Metals 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.