Correlation Between Vendetta Mining and Finlay Minerals

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

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

Diversification Opportunities for Vendetta Mining and Finlay Minerals

-0.12

Correlation Coefficient

Vendetta Mining  Finlay Minerals

Good diversification

The 3 months correlation between Vendetta and Finlay is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vendetta Mining Corp and Finlay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finlay Minerals and Vendetta 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 Vendetta Mining Corp are associated (or correlated) with Finlay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finlay Minerals has no effect on the direction of Vendetta Mining i.e., Vendetta Mining and Finlay Minerals go up and down completely randomly.

Pair Corralation between Vendetta Mining and Finlay Minerals

Assuming the 90 days horizon Vendetta Mining Corp is not expected to generate positive returns. However, Vendetta Mining Corp is 2.03 times less risky than Finlay Minerals. It waists most of its returns potential to compensate for thr risk taken. Finlay Minerals is generating about 0.17 per unit of risk. If you would invest  2.00  in Finlay Minerals on December 29, 2024 and sell it today you would earn a total of  6.00  from holding Finlay Minerals or generate 300.0% return on investment over 90 days.

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

Vendetta Mining Corp  vs.  Finlay Minerals

Vendetta Mining Corp

Risk-Adjusted Performance

Very Weak

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

Finlay Minerals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Finlay Minerals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Finlay Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vendetta Mining and Finlay Minerals

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

The idea behind Vendetta Mining Corp and Finlay Minerals 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.