Correlation Between American Helium and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both American Helium and Eskay Mining 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 Helium and Eskay Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Helium and Eskay Mining Corp, you can compare the effects of market volatilities on American Helium and Eskay Mining 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 Helium with a short position of Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Helium and Eskay Mining.
Diversification Opportunities for American Helium and Eskay Mining
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Eskay is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding American Helium and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp and American Helium 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 Helium are associated (or correlated) with Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of American Helium i.e., American Helium and Eskay Mining go up and down completely randomly.
Pair Corralation between American Helium and Eskay Mining
Assuming the 90 days horizon American Helium is expected to generate 0.44 times more return on investment than Eskay Mining. However, American Helium is 2.27 times less risky than Eskay Mining. It trades about 0.21 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.17 per unit of risk. If you would invest 10.00 in American Helium on August 29, 2024 and sell it today you would earn a total of 1.00 from holding American Helium or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Helium vs. Eskay Mining Corp
Performance |
| Timeline |
| American Helium |
| Eskay Mining Corp |
American Helium and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Helium and Eskay Mining
The main advantage of trading using opposite American Helium and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Helium position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| American Helium vs. Huntsman Exploration | American Helium vs. Aurelia Metals Limited | American Helium vs. Adriatic Metals PLC | American Helium vs. Progressive Planet Solutions |
| Eskay Mining vs. Ascendant Resources | Eskay Mining vs. Cantex Mine Development | Eskay Mining vs. Amarc Resources | Eskay Mining vs. Sterling Metals 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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