Correlation Between American Creek and Teuton Resources
Can any of the company-specific risk be diversified away by investing in both American Creek and Teuton 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 American Creek and Teuton Resources 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 Teuton Resources Corp, you can compare the effects of market volatilities on American Creek and Teuton 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 American Creek with a short position of Teuton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Teuton Resources.
Diversification Opportunities for American Creek and Teuton Resources
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Teuton is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Teuton Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teuton Resources 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 Teuton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teuton Resources Corp has no effect on the direction of American Creek i.e., American Creek and Teuton Resources go up and down completely randomly.
Pair Corralation between American Creek and Teuton Resources
Assuming the 90 days horizon American Creek Resources is expected to generate 1.74 times more return on investment than Teuton Resources. However, American Creek is 1.74 times more volatile than Teuton Resources Corp. It trades about 0.05 of its potential returns per unit of risk. Teuton Resources Corp is currently generating about 0.02 per unit of risk. If you would invest 14.00 in American Creek Resources on August 30, 2024 and sell it today you would earn a total of 18.00 from holding American Creek Resources or generate 128.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Creek Resources vs. Teuton Resources Corp
Performance |
| Timeline |
| American Creek Resources |
| Teuton Resources Corp |
American Creek and Teuton Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Creek and Teuton Resources
The main advantage of trading using opposite American Creek and Teuton Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Teuton 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 Teuton Resources will offset losses from the drop in Teuton Resources' long position.| American Creek vs. Teuton Resources Corp | American Creek vs. Kore Mining | American Creek vs. Endurance Gold Corp | American Creek vs. Strikepoint Gold |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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