Correlation Between American Creek and Auryn Mining
Can any of the company-specific risk be diversified away by investing in both American Creek and Auryn Mining 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 Auryn Mining 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 Auryn Mining Corp, you can compare the effects of market volatilities on American Creek and Auryn Mining 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 Auryn Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Auryn Mining.
Diversification Opportunities for American Creek and Auryn Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Auryn is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Auryn Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auryn Mining Corp 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 Auryn Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auryn Mining Corp has no effect on the direction of American Creek i.e., American Creek and Auryn Mining go up and down completely randomly.
Pair Corralation between American Creek and Auryn Mining
Assuming the 90 days horizon American Creek is expected to generate 4.11 times less return on investment than Auryn Mining. But when comparing it to its historical volatility, American Creek Resources is 1.22 times less risky than Auryn Mining. It trades about 0.03 of its potential returns per unit of risk. Auryn Mining Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 46.00 in Auryn Mining Corp on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Auryn Mining Corp or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Creek Resources vs. Auryn Mining Corp
Performance |
| Timeline |
| American Creek Resources |
| Auryn Mining Corp |
American Creek and Auryn Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Creek and Auryn Mining
The main advantage of trading using opposite American Creek and Auryn Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Auryn Mining 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 Auryn Mining will offset losses from the drop in Auryn Mining's long position.| American Creek vs. Advantage Solutions | American Creek vs. Atlas Corp | American Creek vs. PureCycle Technologies | American Creek vs. WM Technology |
| Auryn Mining vs. Medinah Minerals | Auryn Mining vs. Group Ten Metals | Auryn Mining vs. American Creek Resources |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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