Correlation Between American Creek and Arctic Star
Can any of the company-specific risk be diversified away by investing in both American Creek and Arctic 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 American Creek and Arctic Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Creek Resources and Arctic Star Exploration, you can compare the effects of market volatilities on American Creek and Arctic 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 American Creek with a short position of Arctic Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Arctic Star.
Diversification Opportunities for American Creek and Arctic Star
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Arctic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Arctic Star Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Star Exploration and American Creek 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 Creek Resources are associated (or correlated) with Arctic Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Star Exploration has no effect on the direction of American Creek i.e., American Creek and Arctic Star go up and down completely randomly.
Pair Corralation between American Creek and Arctic Star
Assuming the 90 days horizon American Creek Resources is expected to generate 0.74 times more return on investment than Arctic Star. However, American Creek Resources is 1.36 times less risky than Arctic Star. It trades about 0.02 of its potential returns per unit of risk. Arctic Star Exploration is currently generating about -0.04 per unit of risk. If you would invest 23.00 in American Creek Resources on August 30, 2024 and sell it today you would earn a total of 0.00 from holding American Creek Resources 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 |
American Creek Resources vs. Arctic Star Exploration
Performance |
| Timeline |
| American Creek Resources |
| Arctic Star Exploration |
American Creek and Arctic Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Creek and Arctic Star
The main advantage of trading using opposite American Creek and Arctic Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Arctic 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 Arctic Star will offset losses from the drop in Arctic Star's long position.| American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
| Arctic Star vs. American Sierra Gold | Arctic Star vs. Aurania Resources | Arctic Star vs. Alien Metals | Arctic Star vs. Gold79 Mines |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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