Correlation Between Amerigo Resources and First Quantum
Can any of the company-specific risk be diversified away by investing in both Amerigo Resources and First Quantum 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 Amerigo Resources and First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amerigo Resources and First Quantum Minerals, you can compare the effects of market volatilities on Amerigo Resources and First Quantum 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 Amerigo Resources with a short position of First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amerigo Resources and First Quantum.
Diversification Opportunities for Amerigo Resources and First Quantum
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amerigo and First is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Amerigo Resources and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals and Amerigo 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 Amerigo Resources are associated (or correlated) with First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Amerigo Resources i.e., Amerigo Resources and First Quantum go up and down completely randomly.
Pair Corralation between Amerigo Resources and First Quantum
Assuming the 90 days horizon Amerigo Resources is expected to under-perform the First Quantum. But the otc stock apears to be less risky and, when comparing its historical volatility, Amerigo Resources is 1.7 times less risky than First Quantum. The otc stock trades about -0.06 of its potential returns per unit of risk. The First Quantum Minerals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,335 in First Quantum Minerals on August 25, 2024 and sell it today you would earn a total of 44.00 from holding First Quantum Minerals or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amerigo Resources vs. First Quantum Minerals
Performance |
| Timeline |
| Amerigo Resources |
| First Quantum Minerals |
Amerigo Resources and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amerigo Resources and First Quantum
The main advantage of trading using opposite Amerigo Resources and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amerigo Resources position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| Amerigo Resources vs. First Quantum Minerals | Amerigo Resources vs. Antofagasta PLC | Amerigo Resources vs. Capstone Copper Corp | Amerigo Resources vs. Copper Mountain Mining |
| First Quantum vs. Amerigo Resources | First Quantum vs. Antofagasta PLC | First Quantum vs. Capstone Copper Corp | First Quantum vs. Copper Mountain Mining |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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