Correlation Between First Colombia and EGPI Firecreek

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

By analyzing existing cross correlation between First Colombia Gold and EGPI Firecreek, you can compare the effects of market volatilities on First Colombia and EGPI Firecreek 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 First Colombia with a short position of EGPI Firecreek. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Colombia and EGPI Firecreek.

Diversification Opportunities for First Colombia and EGPI Firecreek

0.0

Correlation Coefficient

First Colombia  EGPI Firecreek

Pay attention - limited upside

The 3 months correlation between First and EGPI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Colombia Gold and EGPI Firecreek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGPI Firecreek and First Colombia 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 First Colombia Gold are associated (or correlated) with EGPI Firecreek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGPI Firecreek has no effect on the direction of First Colombia i.e., First Colombia and EGPI Firecreek go up and down completely randomly.

Pair Corralation between First Colombia and EGPI Firecreek

If you would invest  0.01  in First Colombia Gold on May 18, 2025 and sell it today you would earn a total of  0.00  from holding First Colombia Gold or generate 0.0% return on investment over 90 days.

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

First Colombia Gold  vs.  EGPI Firecreek

First Colombia Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Colombia Gold are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, First Colombia exhibited solid returns over the last few months and may actually be approaching a breakup point.

EGPI Firecreek

Risk-Adjusted Performance

Weakest

Over the last 90 days EGPI Firecreek has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, EGPI Firecreek is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with First Colombia and EGPI Firecreek

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

The idea behind First Colombia Gold and EGPI Firecreek 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.