Correlation Between First Colombia and Intl Star

Can any of the company-specific risk be diversified away by investing in both First Colombia and Intl Star 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 Intl Star 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 Intl Star, you can compare the effects of market volatilities on First Colombia and Intl Star 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 Intl Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Colombia and Intl Star.

Diversification Opportunities for First Colombia and Intl Star

-0.36

Correlation Coefficient

First Colombia  Intl Star

Very good diversification

The 3 months correlation between First and Intl is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding First Colombia Gold and Intl Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intl Star 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 Intl Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intl Star has no effect on the direction of First Colombia i.e., First Colombia and Intl Star go up and down completely randomly.

Pair Corralation between First Colombia and Intl Star

Given the investment horizon of 90 days First Colombia Gold is expected to generate 21.13 times more return on investment than Intl Star. However, First Colombia is 21.13 times more volatile than Intl Star. It trades about 0.33 of its potential returns per unit of risk. Intl Star is currently generating about -0.02 per unit of risk. If you would invest  0.01  in First Colombia Gold on May 12, 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	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Colombia Gold  vs.  Intl Star

First Colombia Gold

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in First Colombia Gold are ranked lower than 26 (%) 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.

Intl Star

Risk-Adjusted Performance

Weakest

Over the last 90 days Intl Star has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with First Colombia and Intl Star

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

The idea behind First Colombia Gold and Intl Star 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.