Correlation Between American Manganese and Knife River
Can any of the company-specific risk be diversified away by investing in both American Manganese and Knife River 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 Manganese and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Manganese and Knife River, you can compare the effects of market volatilities on American Manganese and Knife River 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 Manganese with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Manganese and Knife River.
Diversification Opportunities for American Manganese and Knife River
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Knife is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding American Manganese and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and American Manganese 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 Manganese are associated (or correlated) with Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of American Manganese i.e., American Manganese and Knife River go up and down completely randomly.
Pair Corralation between American Manganese and Knife River
Assuming the 90 days horizon American Manganese is expected to under-perform the Knife River. In addition to that, American Manganese is 3.11 times more volatile than Knife River. It trades about -0.01 of its total potential returns per unit of risk. Knife River is currently generating about 0.12 per unit of volatility. If you would invest 7,171 in Knife River on August 23, 2024 and sell it today you would earn a total of 2,659 from holding Knife River or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
American Manganese vs. Knife River
Performance |
| Timeline |
| American Manganese |
| Knife River |
American Manganese and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Manganese and Knife River
The main advantage of trading using opposite American Manganese and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Manganese position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| American Manganese vs. Mundoro Capital | American Manganese vs. Norra Metals Corp | American Manganese vs. E79 Resources Corp | American Manganese vs. Lithium Australia NL |
| Knife River vs. Cemex SAB de | Knife River vs. Boise Cascad Llc | Knife River vs. CRH PLC ADR | Knife River vs. Eagle Materials |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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