Correlation Between American Copper and Magellan Gold
Can any of the company-specific risk be diversified away by investing in both American Copper and Magellan Gold 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 American Copper and Magellan Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Copper Development and Magellan Gold Corp, you can compare the effects of market volatilities on American Copper and Magellan Gold 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 American Copper with a short position of Magellan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Copper and Magellan Gold.
Diversification Opportunities for American Copper and Magellan Gold
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Magellan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Copper Development and Magellan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Gold Corp and American Copper 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 American Copper Development are associated (or correlated) with Magellan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Gold Corp has no effect on the direction of American Copper i.e., American Copper and Magellan Gold go up and down completely randomly.
Pair Corralation between American Copper and Magellan Gold
Assuming the 90 days horizon American Copper Development is expected to generate 2.27 times more return on investment than Magellan Gold. However, American Copper is 2.27 times more volatile than Magellan Gold Corp. It trades about 0.08 of its potential returns per unit of risk. Magellan Gold Corp is currently generating about -0.03 per unit of risk. If you would invest 2.60 in American Copper Development on September 3, 2024 and sell it today you would earn a total of 0.04 from holding American Copper Development or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Copper Development vs. Magellan Gold Corp
Performance |
| Timeline |
| American Copper Deve |
| Magellan Gold Corp |
American Copper and Magellan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Copper and Magellan Gold
The main advantage of trading using opposite American Copper and Magellan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Copper position performs unexpectedly, Magellan Gold 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 Magellan Gold will offset losses from the drop in Magellan Gold's long position.| American Copper vs. Artisan Partners Asset | American Copper vs. JBG SMITH Properties | American Copper vs. PennantPark Floating Rate | American Copper vs. Sabra Healthcare REIT |
| Magellan Gold vs. Vortex Metals | Magellan Gold vs. Compania de Minas | Magellan Gold vs. American Copper Development | Magellan Gold vs. Triple Flag Precious |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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