Correlation Between American Creek and Scottie Resources
Can any of the company-specific risk be diversified away by investing in both American Creek and Scottie Resources 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 Scottie Resources 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 Scottie Resources Corp, you can compare the effects of market volatilities on American Creek and Scottie Resources 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 Scottie Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Scottie Resources.
Diversification Opportunities for American Creek and Scottie Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Scottie is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Scottie Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottie Resources 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 Scottie Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottie Resources Corp has no effect on the direction of American Creek i.e., American Creek and Scottie Resources go up and down completely randomly.
Pair Corralation between American Creek and Scottie Resources
Assuming the 90 days horizon American Creek Resources is expected to generate 0.64 times more return on investment than Scottie Resources. However, American Creek Resources is 1.57 times less risky than Scottie Resources. It trades about -0.01 of its potential returns per unit of risk. Scottie Resources Corp is currently generating about -0.03 per unit of risk. If you would invest 22.00 in American Creek Resources on September 14, 2024 and sell it today you would lose (1.00) from holding American Creek Resources or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Creek Resources vs. Scottie Resources Corp
Performance |
| Timeline |
| American Creek Resources |
| Scottie Resources Corp |
American Creek and Scottie Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Creek and Scottie Resources
The main advantage of trading using opposite American Creek and Scottie Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Scottie Resources 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 Scottie Resources will offset losses from the drop in Scottie Resources' 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 |
| Scottie Resources vs. Gold79 Mines | Scottie Resources vs. Arctic Star Exploration | Scottie Resources vs. Arras Minerals Corp | Scottie Resources 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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