Correlation Between American Helium and Pampa Metals
Can any of the company-specific risk be diversified away by investing in both American Helium and Pampa Metals 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 Pampa Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Helium and Pampa Metals, you can compare the effects of market volatilities on American Helium and Pampa Metals 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 Pampa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Helium and Pampa Metals.
Diversification Opportunities for American Helium and Pampa Metals
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Pampa is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Helium and Pampa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Metals 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 Pampa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Metals has no effect on the direction of American Helium i.e., American Helium and Pampa Metals go up and down completely randomly.
Pair Corralation between American Helium and Pampa Metals
Assuming the 90 days horizon American Helium is expected to generate 1.69 times less return on investment than Pampa Metals. But when comparing it to its historical volatility, American Helium is 1.09 times less risky than Pampa Metals. It trades about 0.04 of its potential returns per unit of risk. Pampa Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Pampa Metals on August 28, 2024 and sell it today you would lose (21.00) from holding Pampa Metals or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Helium vs. Pampa Metals
Performance |
| Timeline |
| American Helium |
| Pampa Metals |
American Helium and Pampa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Helium and Pampa Metals
The main advantage of trading using opposite American Helium and Pampa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Helium position performs unexpectedly, Pampa Metals 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 Pampa Metals will offset losses from the drop in Pampa Metals' 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 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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