Correlation Between MOAB MINERALS and FOSTOURGRP

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

By analyzing existing cross correlation between MOAB MINERALS LTD and FOSTOURGRP EO 0001, you can compare the effects of market volatilities on MOAB MINERALS and FOSTOURGRP 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 MOAB MINERALS with a short position of FOSTOURGRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOAB MINERALS and FOSTOURGRP.

Diversification Opportunities for MOAB MINERALS and FOSTOURGRP

-0.4

Correlation Coefficient

MOAB MINERALS  FOSTOURGRP

Very good diversification

The 3 months correlation between MOAB and FOSTOURGRP is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MOAB MINERALS LTD and FOSTOURGRP EO 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOSTOURGRP EO 0001 and MOAB MINERALS 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 MOAB MINERALS LTD are associated (or correlated) with FOSTOURGRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOSTOURGRP EO 0001 has no effect on the direction of MOAB MINERALS i.e., MOAB MINERALS and FOSTOURGRP go up and down completely randomly.

Pair Corralation between MOAB MINERALS and FOSTOURGRP

Assuming the 90 days trading horizon MOAB MINERALS is expected to generate 2.12 times less return on investment than FOSTOURGRP. In addition to that, MOAB MINERALS is 1.96 times more volatile than FOSTOURGRP EO 0001. It trades about 0.06 of its total potential returns per unit of risk. FOSTOURGRP EO 0001 is currently generating about 0.26 per unit of volatility. If you would invest  40.00  in FOSTOURGRP EO 0001 on September 23, 2024 and sell it today you would earn a total of  50.00  from holding FOSTOURGRP EO 0001 or generate 125.0% return on investment over 90 days.

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

MOAB MINERALS LTD  vs.  FOSTOURGRP EO 0001

MOAB MINERALS LTD

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MOAB MINERALS LTD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MOAB MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

FOSTOURGRP EO 0001

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FOSTOURGRP EO 0001 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FOSTOURGRP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOAB MINERALS and FOSTOURGRP

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

The idea behind MOAB MINERALS LTD and FOSTOURGRP EO 0001 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.