Correlation Between American Clean and Mason Graphite
Can any of the company-specific risk be diversified away by investing in both American Clean and Mason Graphite 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 Clean and Mason Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Clean Resources and Mason Graphite, you can compare the effects of market volatilities on American Clean and Mason Graphite 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 Clean with a short position of Mason Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Clean and Mason Graphite.
Diversification Opportunities for American Clean and Mason Graphite
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Mason is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Clean Resources and Mason Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mason Graphite and American Clean 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 Clean Resources are associated (or correlated) with Mason Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mason Graphite has no effect on the direction of American Clean i.e., American Clean and Mason Graphite go up and down completely randomly.
Pair Corralation between American Clean and Mason Graphite
Given the investment horizon of 90 days American Clean Resources is expected to under-perform the Mason Graphite. But the pink sheet apears to be less risky and, when comparing its historical volatility, American Clean Resources is 1.92 times less risky than Mason Graphite. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Mason Graphite is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6.19 in Mason Graphite on October 26, 2024 and sell it today you would lose (1.19) from holding Mason Graphite or give up 19.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Clean Resources vs. Mason Graphite
Performance |
| Timeline |
| American Clean Resources |
| Mason Graphite |
American Clean and Mason Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Clean and Mason Graphite
The main advantage of trading using opposite American Clean and Mason Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Clean position performs unexpectedly, Mason Graphite 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 Mason Graphite will offset losses from the drop in Mason Graphite's long position.| American Clean vs. Gold79 Mines | American Clean vs. Arctic Star Exploration | American Clean vs. Arras Minerals Corp | American Clean vs. American Creek Resources |
| Mason Graphite vs. Arctic Star Exploration | Mason Graphite vs. American Clean Resources | Mason Graphite vs. Arras Minerals Corp | Mason Graphite 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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