Correlation Between Arctic Star and Mountain Boy
Can any of the company-specific risk be diversified away by investing in both Arctic Star and Mountain Boy 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 Arctic Star and Mountain Boy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arctic Star Exploration and Mountain Boy Minerals, you can compare the effects of market volatilities on Arctic Star and Mountain Boy 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 Arctic Star with a short position of Mountain Boy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arctic Star and Mountain Boy.
Diversification Opportunities for Arctic Star and Mountain Boy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arctic and Mountain is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Star Exploration and Mountain Boy Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Boy Minerals and Arctic Star 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 Arctic Star Exploration are associated (or correlated) with Mountain Boy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Boy Minerals has no effect on the direction of Arctic Star i.e., Arctic Star and Mountain Boy go up and down completely randomly.
Pair Corralation between Arctic Star and Mountain Boy
Assuming the 90 days horizon Arctic Star Exploration is expected to generate 1.23 times more return on investment than Mountain Boy. However, Arctic Star is 1.23 times more volatile than Mountain Boy Minerals. It trades about 0.05 of its potential returns per unit of risk. Mountain Boy Minerals is currently generating about 0.0 per unit of risk. If you would invest 1.45 in Arctic Star Exploration on December 2, 2024 and sell it today you would lose (0.38) from holding Arctic Star Exploration or give up 26.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.0% |
| Values | Daily Returns |
Arctic Star Exploration vs. Mountain Boy Minerals
Performance |
| Timeline |
| Arctic Star Exploration |
| Mountain Boy Minerals |
Arctic Star and Mountain Boy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arctic Star and Mountain Boy
The main advantage of trading using opposite Arctic Star and Mountain Boy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arctic Star position performs unexpectedly, Mountain Boy 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 Mountain Boy will offset losses from the drop in Mountain Boy's long position.| Arctic Star vs. American Sierra Gold | Arctic Star vs. Aurania Resources | Arctic Star vs. Alien Metals | Arctic Star vs. Gold79 Mines |
| Mountain Boy vs. Kodiak Copper Corp | Mountain Boy vs. Scottie Resources Corp | Mountain Boy vs. Silver Tiger Metals | Mountain Boy vs. Summa Silver Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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