Correlation Between AER Energy and MMEX Resources
Can any of the company-specific risk be diversified away by investing in both AER Energy and MMEX 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 AER Energy and MMEX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AER Energy Resources and MMEX Resources Corp, you can compare the effects of market volatilities on AER Energy and MMEX 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 AER Energy with a short position of MMEX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of AER Energy and MMEX Resources.
Diversification Opportunities for AER Energy and MMEX Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between AER and MMEX is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding AER Energy Resources and MMEX Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MMEX Resources Corp and AER Energy 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 AER Energy Resources are associated (or correlated) with MMEX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MMEX Resources Corp has no effect on the direction of AER Energy i.e., AER Energy and MMEX Resources go up and down completely randomly.
Pair Corralation between AER Energy and MMEX Resources
Given the investment horizon of 90 days AER Energy is expected to generate 11.72 times less return on investment than MMEX Resources. But when comparing it to its historical volatility, AER Energy Resources is 3.44 times less risky than MMEX Resources. It trades about 0.06 of its potential returns per unit of risk. MMEX Resources Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.99 in MMEX Resources Corp on August 31, 2024 and sell it today you would lose (1.99) from holding MMEX Resources Corp or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
AER Energy Resources vs. MMEX Resources Corp
Performance |
| Timeline |
| AER Energy Resources |
| MMEX Resources Corp |
AER Energy and MMEX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AER Energy and MMEX Resources
The main advantage of trading using opposite AER Energy and MMEX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AER Energy position performs unexpectedly, MMEX 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 MMEX Resources will offset losses from the drop in MMEX Resources' long position.| AER Energy vs. Caduceus Software Systems | AER Energy vs. North Springs Resources | AER Energy vs. Nyxio Tech Corp | AER Energy vs. Access Power Co |
| MMEX Resources vs. MDM Permian | MMEX Resources vs. Saturn Oil Gas | MMEX Resources vs. Razor Energy Corp | MMEX Resources vs. Strat Petroleum |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |