Correlation Between American Manganese and Nuinsco Resources
Can any of the company-specific risk be diversified away by investing in both American Manganese and Nuinsco 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 Manganese and Nuinsco Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Manganese and Nuinsco Resources Limited, you can compare the effects of market volatilities on American Manganese and Nuinsco 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 Manganese with a short position of Nuinsco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Manganese and Nuinsco Resources.
Diversification Opportunities for American Manganese and Nuinsco Resources
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Nuinsco is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Manganese and Nuinsco Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuinsco Resources 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 Nuinsco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuinsco Resources has no effect on the direction of American Manganese i.e., American Manganese and Nuinsco Resources go up and down completely randomly.
Pair Corralation between American Manganese and Nuinsco Resources
Assuming the 90 days horizon American Manganese is expected to generate 0.42 times more return on investment than Nuinsco Resources. However, American Manganese is 2.39 times less risky than Nuinsco Resources. It trades about 0.24 of its potential returns per unit of risk. Nuinsco Resources Limited is currently generating about -0.06 per unit of risk. If you would invest 6.40 in American Manganese on August 31, 2024 and sell it today you would earn a total of 3.40 from holding American Manganese or generate 53.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Manganese vs. Nuinsco Resources Limited
Performance |
| Timeline |
| American Manganese |
| Nuinsco Resources |
American Manganese and Nuinsco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Manganese and Nuinsco Resources
The main advantage of trading using opposite American Manganese and Nuinsco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Manganese position performs unexpectedly, Nuinsco 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 Nuinsco Resources will offset losses from the drop in Nuinsco Resources' long position.| American Manganese vs. Liontown Resources Limited | American Manganese vs. ATT Inc | American Manganese vs. Merck Company | American Manganese vs. Walt Disney |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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