Correlation Between Foran Mining and Premium Resources

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

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

Diversification Opportunities for Foran Mining and Premium Resources

-0.4

Correlation Coefficient

Foran Mining  Premium Resources

Very good diversification

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

Pair Corralation between Foran Mining and Premium Resources

Assuming the 90 days trading horizon Foran Mining is expected to under-perform the Premium Resources. But the stock apears to be less risky and, when comparing its historical volatility, Foran Mining is 2.04 times less risky than Premium Resources. The stock trades about -0.1 of its potential returns per unit of risk. The Premium Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  840.00  in Premium Resources on April 21, 2025 and sell it today you would earn a total of  55.00  from holding Premium Resources or generate 6.55% return on investment over 90 days.

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

Foran Mining  vs.  Premium Resources

Foran Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Foran Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Premium Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Premium Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Premium Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Foran Mining and Premium Resources

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

The idea behind Foran Mining and Premium Resources 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.