Correlation Between AMG Advanced and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Jadestone Energy 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 AMG Advanced and Jadestone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Jadestone Energy, you can compare the effects of market volatilities on AMG Advanced and Jadestone Energy 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 AMG Advanced with a short position of Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Jadestone Energy.
Diversification Opportunities for AMG Advanced and Jadestone Energy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AMG and Jadestone is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of AMG Advanced i.e., AMG Advanced and Jadestone Energy go up and down completely randomly.
Pair Corralation between AMG Advanced and Jadestone Energy
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Jadestone Energy. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 1.55 times less risky than Jadestone Energy. The stock trades about -0.11 of its potential returns per unit of risk. The Jadestone Energy is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,380 in Jadestone Energy on September 12, 2024 and sell it today you would lose (780.00) from holding Jadestone Energy or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.73% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Jadestone Energy
Performance |
| Timeline |
| AMG Advanced Metallu |
| Jadestone Energy |
AMG Advanced and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Jadestone Energy
The main advantage of trading using opposite AMG Advanced and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| AMG Advanced vs. Neometals | AMG Advanced vs. Bisichi Mining PLC | AMG Advanced vs. Playtech Plc | AMG Advanced vs. Metals Exploration Plc |
| Jadestone Energy vs. Odyssean Investment Trust | Jadestone Energy vs. AMG Advanced Metallurgical | Jadestone Energy vs. Herald Investment Trust | Jadestone Energy vs. McEwen 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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