Correlation Between American Creek and Mountain Boy
Can any of the company-specific risk be diversified away by investing in both American Creek and Mountain Boy 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 Mountain Boy 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 Mountain Boy Minerals, you can compare the effects of market volatilities on American Creek and Mountain Boy 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 Mountain Boy. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Mountain Boy.
Diversification Opportunities for American Creek and Mountain Boy
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Mountain is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Mountain Boy Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Boy Minerals 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 Mountain Boy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Boy Minerals has no effect on the direction of American Creek i.e., American Creek and Mountain Boy go up and down completely randomly.
Pair Corralation between American Creek and Mountain Boy
Assuming the 90 days horizon American Creek Resources is expected to generate 0.66 times more return on investment than Mountain Boy. However, American Creek Resources is 1.51 times less risky than Mountain Boy. It trades about 0.03 of its potential returns per unit of risk. Mountain Boy Minerals is currently generating about -0.14 per unit of risk. If you would invest 22.00 in American Creek Resources on September 13, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Creek Resources vs. Mountain Boy Minerals
Performance |
| Timeline |
| American Creek Resources |
| Mountain Boy Minerals |
American Creek and Mountain Boy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Creek and Mountain Boy
The main advantage of trading using opposite American Creek and Mountain Boy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Mountain Boy 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 Mountain Boy will offset losses from the drop in Mountain Boy'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 |
| Mountain Boy vs. Kodiak Copper Corp | Mountain Boy vs. Scottie Resources Corp | Mountain Boy vs. Silver Tiger Metals | Mountain Boy vs. Summa Silver Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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