Correlation Between American Manganese and Small Cap
Can any of the company-specific risk be diversified away by investing in both American Manganese and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Manganese and Small Cap Core, you can compare the effects of market volatilities on American Manganese and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Manganese and Small Cap.
Diversification Opportunities for American Manganese and Small Cap
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Small is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Manganese and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Core has no effect on the direction of American Manganese i.e., American Manganese and Small Cap go up and down completely randomly.
Pair Corralation between American Manganese and Small Cap
Assuming the 90 days horizon American Manganese is expected to under-perform the Small Cap. In addition to that, American Manganese is 5.44 times more volatile than Small Cap Core. It trades about 0.0 of its total potential returns per unit of risk. Small Cap Core is currently generating about 0.06 per unit of volatility. If you would invest 1,056 in Small Cap Core on August 26, 2024 and sell it today you would earn a total of 430.00 from holding Small Cap Core or generate 40.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Manganese vs. Small Cap Core
Performance |
| Timeline |
| American Manganese |
| Small Cap Core |
American Manganese and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Manganese and Small Cap
The main advantage of trading using opposite American Manganese and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Manganese position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| American Manganese vs. Graphano Energy | American Manganese vs. Generation Mining Limited | American Manganese vs. Northern Graphite | American Manganese vs. Western Resources Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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