Correlation Between Amex Exploration and Bluestone Resources
Can any of the company-specific risk be diversified away by investing in both Amex Exploration and Bluestone 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 Amex Exploration and Bluestone Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amex Exploration and Bluestone Resources, you can compare the effects of market volatilities on Amex Exploration and Bluestone 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 Amex Exploration with a short position of Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amex Exploration and Bluestone Resources.
Diversification Opportunities for Amex Exploration and Bluestone Resources
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amex and Bluestone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Amex Exploration and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone Resources and Amex Exploration 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 Amex Exploration are associated (or correlated) with Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of Amex Exploration i.e., Amex Exploration and Bluestone Resources go up and down completely randomly.
Pair Corralation between Amex Exploration and Bluestone Resources
Assuming the 90 days horizon Amex Exploration is expected to generate 0.97 times more return on investment than Bluestone Resources. However, Amex Exploration is 1.03 times less risky than Bluestone Resources. It trades about -0.12 of its potential returns per unit of risk. Bluestone Resources is currently generating about -0.24 per unit of risk. If you would invest 91.00 in Amex Exploration on September 13, 2024 and sell it today you would lose (14.00) from holding Amex Exploration or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amex Exploration vs. Bluestone Resources
Performance |
| Timeline |
| Amex Exploration |
| Bluestone Resources |
Amex Exploration and Bluestone Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amex Exploration and Bluestone Resources
The main advantage of trading using opposite Amex Exploration and Bluestone Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amex Exploration position performs unexpectedly, Bluestone 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 Bluestone Resources will offset losses from the drop in Bluestone Resources' long position.| Amex Exploration vs. Minnova Corp | Amex Exploration vs. Argo Gold | Amex Exploration vs. Advance Gold Corp | Amex Exploration vs. Blue Star Gold |
| Bluestone Resources vs. Minnova Corp | Bluestone Resources vs. Argo Gold | Bluestone Resources vs. Advance Gold Corp | Bluestone Resources vs. Blue Star Gold |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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