Correlation Between American Clean and USCorp
Can any of the company-specific risk be diversified away by investing in both American Clean and USCorp 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 USCorp 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 USCorp, you can compare the effects of market volatilities on American Clean and USCorp 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 USCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Clean and USCorp.
Diversification Opportunities for American Clean and USCorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and USCorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Clean Resources and USCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCorp 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 USCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCorp has no effect on the direction of American Clean i.e., American Clean and USCorp go up and down completely randomly.
Pair Corralation between American Clean and USCorp
If you would invest 0.01 in USCorp on October 26, 2024 and sell it today you would earn a total of 0.01 from holding USCorp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
American Clean Resources vs. USCorp
Performance |
| Timeline |
| American Clean Resources |
| USCorp |
American Clean and USCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Clean and USCorp
The main advantage of trading using opposite American Clean and USCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Clean position performs unexpectedly, USCorp 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 USCorp will offset losses from the drop in USCorp'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 |
| USCorp vs. Arctic Star Exploration | USCorp vs. American Clean Resources | USCorp vs. Arras Minerals Corp | USCorp 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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