Correlation Between AfriTin Mining and Pan American
Can any of the company-specific risk be diversified away by investing in both AfriTin Mining and Pan American 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 AfriTin Mining and Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfriTin Mining and Pan American Silver, you can compare the effects of market volatilities on AfriTin Mining and Pan American 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 AfriTin Mining with a short position of Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfriTin Mining and Pan American.
Diversification Opportunities for AfriTin Mining and Pan American
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AfriTin and Pan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AfriTin Mining and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver and AfriTin Mining 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 AfriTin Mining are associated (or correlated) with Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of AfriTin Mining i.e., AfriTin Mining and Pan American go up and down completely randomly.
Pair Corralation between AfriTin Mining and Pan American
Assuming the 90 days trading horizon AfriTin Mining is expected to under-perform the Pan American. In addition to that, AfriTin Mining is 1.44 times more volatile than Pan American Silver. It trades about -0.1 of its total potential returns per unit of risk. Pan American Silver is currently generating about -0.09 per unit of volatility. If you would invest 3,137 in Pan American Silver on October 20, 2024 and sell it today you would lose (112.00) from holding Pan American Silver or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
AfriTin Mining vs. Pan American Silver
Performance |
| Timeline |
| AfriTin Mining |
| Pan American Silver |
AfriTin Mining and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfriTin Mining and Pan American
The main advantage of trading using opposite AfriTin Mining and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfriTin Mining position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| AfriTin Mining vs. Europa Metals | AfriTin Mining vs. AMG Advanced Metallurgical | AfriTin Mining vs. URU Metals | AfriTin Mining vs. Beowulf Mining |
| Pan American vs. Ecclesiastical Insurance Office | Pan American vs. Tata Steel Limited | Pan American vs. Fortune Brands Home | Pan American vs. Waste Management |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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