Correlation Between Angkor Resources and Hannan Metals
Can any of the company-specific risk be diversified away by investing in both Angkor Resources and Hannan Metals 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 Angkor Resources and Hannan Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angkor Resources Corp and Hannan Metals, you can compare the effects of market volatilities on Angkor Resources and Hannan Metals 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 Angkor Resources with a short position of Hannan Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angkor Resources and Hannan Metals.
Diversification Opportunities for Angkor Resources and Hannan Metals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Angkor and Hannan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Angkor Resources Corp and Hannan Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannan Metals and Angkor Resources 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 Angkor Resources Corp are associated (or correlated) with Hannan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannan Metals has no effect on the direction of Angkor Resources i.e., Angkor Resources and Hannan Metals go up and down completely randomly.
Pair Corralation between Angkor Resources and Hannan Metals
Assuming the 90 days horizon Angkor Resources Corp is expected to generate 1.4 times more return on investment than Hannan Metals. However, Angkor Resources is 1.4 times more volatile than Hannan Metals. It trades about 0.01 of its potential returns per unit of risk. Hannan Metals is currently generating about -0.02 per unit of risk. If you would invest 10.00 in Angkor Resources Corp on August 26, 2024 and sell it today you would lose (0.50) from holding Angkor Resources Corp or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Angkor Resources Corp vs. Hannan Metals
Performance |
| Timeline |
| Angkor Resources Corp |
| Hannan Metals |
Angkor Resources and Hannan Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Angkor Resources and Hannan Metals
The main advantage of trading using opposite Angkor Resources and Hannan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angkor Resources position performs unexpectedly, Hannan Metals 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 Hannan Metals will offset losses from the drop in Hannan Metals' long position.| Angkor Resources vs. Lupaka Gold Corp | Angkor Resources vs. Avrupa Minerals | Angkor Resources vs. Asiabasemetals |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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