Correlation Between American Eagle and Nine Mile
Can any of the company-specific risk be diversified away by investing in both American Eagle and Nine Mile 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 Eagle and Nine Mile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Eagle Gold and Nine Mile Metals, you can compare the effects of market volatilities on American Eagle and Nine Mile 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 Eagle with a short position of Nine Mile. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Eagle and Nine Mile.
Diversification Opportunities for American Eagle and Nine Mile
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Nine is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding American Eagle Gold and Nine Mile Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Mile Metals and American Eagle 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 Eagle Gold are associated (or correlated) with Nine Mile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Mile Metals has no effect on the direction of American Eagle i.e., American Eagle and Nine Mile go up and down completely randomly.
Pair Corralation between American Eagle and Nine Mile
Assuming the 90 days horizon American Eagle Gold is expected to under-perform the Nine Mile. But the pink sheet apears to be less risky and, when comparing its historical volatility, American Eagle Gold is 3.48 times less risky than Nine Mile. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Nine Mile Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Nine Mile Metals on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Nine Mile Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Eagle Gold vs. Nine Mile Metals
Performance |
| Timeline |
| American Eagle Gold |
| Nine Mile Metals |
American Eagle and Nine Mile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Eagle and Nine Mile
The main advantage of trading using opposite American Eagle and Nine Mile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Eagle position performs unexpectedly, Nine Mile 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 Nine Mile will offset losses from the drop in Nine Mile's long position.| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
| Nine Mile vs. Endurance Gold | Nine Mile vs. Red Pine Exploration | Nine Mile vs. Altamira Gold Corp | Nine Mile vs. Grande Portage 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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