Correlation Between Majedie Investments and FC Investment
Can any of the company-specific risk be diversified away by investing in both Majedie Investments and FC Investment 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 Majedie Investments and FC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Majedie Investments and FC Investment Trust, you can compare the effects of market volatilities on Majedie Investments and FC Investment 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 Majedie Investments with a short position of FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Majedie Investments and FC Investment.
Diversification Opportunities for Majedie Investments and FC Investment
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Majedie and FCIT is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Majedie Investments and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust and Majedie Investments 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 Majedie Investments are associated (or correlated) with FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Majedie Investments i.e., Majedie Investments and FC Investment go up and down completely randomly.
Pair Corralation between Majedie Investments and FC Investment
Assuming the 90 days trading horizon Majedie Investments is expected to generate 2.62 times more return on investment than FC Investment. However, Majedie Investments is 2.62 times more volatile than FC Investment Trust. It trades about 0.1 of its potential returns per unit of risk. FC Investment Trust is currently generating about 0.14 per unit of risk. If you would invest 23,191 in Majedie Investments on September 3, 2025 and sell it today you would earn a total of 3,009 from holding Majedie Investments or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Majedie Investments vs. FC Investment Trust
Performance |
| Timeline |
| Majedie Investments |
| FC Investment Trust |
Majedie Investments and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Majedie Investments and FC Investment
The main advantage of trading using opposite Majedie Investments and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Majedie Investments position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| Majedie Investments vs. Infineon Technologies AG | Majedie Investments vs. Mineral Financial Investments | Majedie Investments vs. Canadian General Investments | Majedie Investments vs. CleanTech Lithium plc |
| FC Investment vs. Golden Metal Resources | FC Investment vs. Indutrade AB | FC Investment vs. iShares Physical Silver | FC Investment vs. Griffin Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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