Correlation Between American Sierra and Auxico Resources
Can any of the company-specific risk be diversified away by investing in both American Sierra and Auxico 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 Sierra and Auxico Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Sierra Gold and Auxico Resources Canada, you can compare the effects of market volatilities on American Sierra and Auxico 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 Sierra with a short position of Auxico Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Sierra and Auxico Resources.
Diversification Opportunities for American Sierra and Auxico Resources
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Auxico is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding American Sierra Gold and Auxico Resources Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxico Resources Canada and American Sierra 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 Sierra Gold are associated (or correlated) with Auxico Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxico Resources Canada has no effect on the direction of American Sierra i.e., American Sierra and Auxico Resources go up and down completely randomly.
Pair Corralation between American Sierra and Auxico Resources
Given the investment horizon of 90 days American Sierra is expected to generate 53.51 times less return on investment than Auxico Resources. But when comparing it to its historical volatility, American Sierra Gold is 6.48 times less risky than Auxico Resources. It trades about 0.02 of its potential returns per unit of risk. Auxico Resources Canada is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Auxico Resources Canada on August 29, 2024 and sell it today you would lose (0.90) from holding Auxico Resources Canada or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Sierra Gold vs. Auxico Resources Canada
Performance |
| Timeline |
| American Sierra Gold |
| Auxico Resources Canada |
American Sierra and Auxico Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Sierra and Auxico Resources
The main advantage of trading using opposite American Sierra and Auxico Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Sierra position performs unexpectedly, Auxico 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 Auxico Resources will offset losses from the drop in Auxico Resources' long position.| American Sierra vs. Morningstar Unconstrained Allocation | American Sierra vs. High Yield Municipal Fund | American Sierra vs. Knife River | American Sierra vs. Klckner Co SE |
| Auxico Resources vs. Cartier Iron Corp | Auxico Resources vs. Arctic Star Exploration | Auxico Resources vs. Capella Minerals Limited | Auxico Resources vs. Denarius 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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