Correlation Between Amarc Resources and American Creek
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and American Creek 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 Amarc Resources and American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amarc Resources and American Creek Resources, you can compare the effects of market volatilities on Amarc Resources and American Creek 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 Amarc Resources with a short position of American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and American Creek.
Diversification Opportunities for Amarc Resources and American Creek
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amarc and American is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources and Amarc 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 Amarc Resources are associated (or correlated) with American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Amarc Resources i.e., Amarc Resources and American Creek go up and down completely randomly.
Pair Corralation between Amarc Resources and American Creek
Assuming the 90 days horizon Amarc Resources is expected to generate 1.74 times less return on investment than American Creek. But when comparing it to its historical volatility, Amarc Resources is 1.13 times less risky than American Creek. It trades about 0.04 of its potential returns per unit of risk. American Creek Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10.00 in American Creek Resources on August 29, 2024 and sell it today you would earn a total of 13.00 from holding American Creek Resources or generate 130.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. American Creek Resources
Performance |
| Timeline |
| Amarc Resources |
| American Creek Resources |
Amarc Resources and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and American Creek
The main advantage of trading using opposite Amarc Resources and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, American Creek 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 American Creek will offset losses from the drop in American Creek's long position.| Amarc Resources vs. Durango Resources | Amarc Resources vs. Avarone Metals | Amarc Resources vs. Pampa Metals | Amarc Resources vs. Sun Summit Minerals |
| American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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