Correlation Between American Rare and Giga Metals
Can any of the company-specific risk be diversified away by investing in both American Rare and Giga 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 American Rare and Giga Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Rare Earths and Giga Metals, you can compare the effects of market volatilities on American Rare and Giga 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 American Rare with a short position of Giga Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Rare and Giga Metals.
Diversification Opportunities for American Rare and Giga Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Giga is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Rare Earths and Giga Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Metals and American Rare 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 Rare Earths are associated (or correlated) with Giga Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giga Metals has no effect on the direction of American Rare i.e., American Rare and Giga Metals go up and down completely randomly.
Pair Corralation between American Rare and Giga Metals
Assuming the 90 days horizon American Rare Earths is expected to generate 1.91 times more return on investment than Giga Metals. However, American Rare is 1.91 times more volatile than Giga Metals. It trades about 0.03 of its potential returns per unit of risk. Giga Metals is currently generating about -0.04 per unit of risk. If you would invest 21.00 in American Rare Earths on October 25, 2024 and sell it today you would lose (2.00) from holding American Rare Earths or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.59% |
| Values | Daily Returns |
American Rare Earths vs. Giga Metals
Performance |
| Timeline |
| American Rare Earths |
| Giga Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Rare and Giga Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Rare and Giga Metals
The main advantage of trading using opposite American Rare and Giga Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Rare position performs unexpectedly, Giga 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 Giga Metals will offset losses from the drop in Giga Metals' long position.| American Rare vs. Aurelia Metals Limited | American Rare vs. Artemis Resources | American Rare vs. Ascendant Resources | American Rare vs. Azimut Exploration |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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