Correlation Between American Creek and Outcrop Gold
Can any of the company-specific risk be diversified away by investing in both American Creek and Outcrop Gold 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 Creek and Outcrop Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Creek Resources and Outcrop Gold Corp, you can compare the effects of market volatilities on American Creek and Outcrop Gold 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 Creek with a short position of Outcrop Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Outcrop Gold.
Diversification Opportunities for American Creek and Outcrop Gold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Outcrop is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Outcrop Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outcrop Gold Corp and American Creek 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 Creek Resources are associated (or correlated) with Outcrop Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outcrop Gold Corp has no effect on the direction of American Creek i.e., American Creek and Outcrop Gold go up and down completely randomly.
Pair Corralation between American Creek and Outcrop Gold
Assuming the 90 days horizon American Creek Resources is expected to under-perform the Outcrop Gold. But the stock apears to be less risky and, when comparing its historical volatility, American Creek Resources is 1.26 times less risky than Outcrop Gold. The stock trades about -0.16 of its potential returns per unit of risk. The Outcrop Gold Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Outcrop Gold Corp on September 3, 2024 and sell it today you would lose (2.00) from holding Outcrop Gold Corp or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Creek Resources vs. Outcrop Gold Corp
Performance |
| Timeline |
| American Creek Resources |
| Outcrop Gold Corp |
American Creek and Outcrop Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Creek and Outcrop Gold
The main advantage of trading using opposite American Creek and Outcrop Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Outcrop Gold 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 Outcrop Gold will offset losses from the drop in Outcrop Gold's long position.| American Creek vs. Teuton Resources Corp | American Creek vs. Kore Mining | American Creek vs. Endurance Gold Corp | American Creek vs. Strikepoint Gold |
| Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Kootenay Silver | Outcrop Gold vs. Kore Mining | Outcrop Gold vs. Blackrock Silver 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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