Correlation Between American Copper and Northern Minerals
Can any of the company-specific risk be diversified away by investing in both American Copper and Northern Minerals 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 Northern Minerals 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 Northern Minerals Exploration, you can compare the effects of market volatilities on American Copper and Northern Minerals 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 Northern Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Copper and Northern Minerals.
Diversification Opportunities for American Copper and Northern Minerals
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Northern is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Copper Development and Northern Minerals Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Minerals 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 Northern Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Minerals has no effect on the direction of American Copper i.e., American Copper and Northern Minerals go up and down completely randomly.
Pair Corralation between American Copper and Northern Minerals
Assuming the 90 days horizon American Copper Development is expected to generate 1.44 times more return on investment than Northern Minerals. However, American Copper is 1.44 times more volatile than Northern Minerals Exploration. It trades about 0.0 of its potential returns per unit of risk. Northern Minerals Exploration is currently generating about -0.04 per unit of risk. If you would invest 3.06 in American Copper Development on November 3, 2024 and sell it today you would lose (0.66) from holding American Copper Development or give up 21.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Copper Development vs. Northern Minerals Exploration
Performance |
| Timeline |
| American Copper Deve |
| Northern Minerals |
American Copper and Northern Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Copper and Northern Minerals
The main advantage of trading using opposite American Copper and Northern Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Copper position performs unexpectedly, Northern Minerals 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 Northern Minerals will offset losses from the drop in Northern Minerals' long position.| American Copper vs. EastGroup Properties | American Copper vs. National CineMedia | American Copper vs. Catalyst Metals Limited | American Copper vs. Fluent Inc |
| Northern Minerals vs. American Copper Development | Northern Minerals vs. Triple Flag Precious | Northern Minerals vs. Hecla Mining | Northern Minerals vs. Compania de Minas |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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