Correlation Between Amarc Resources and Boss Resources
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and Boss Resources 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 Boss Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amarc Resources and Boss Resources, you can compare the effects of market volatilities on Amarc Resources and Boss Resources 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 Boss Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and Boss Resources.
Diversification Opportunities for Amarc Resources and Boss Resources
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amarc and Boss is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Boss Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss 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 Boss Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Resources has no effect on the direction of Amarc Resources i.e., Amarc Resources and Boss Resources go up and down completely randomly.
Pair Corralation between Amarc Resources and Boss Resources
Assuming the 90 days horizon Amarc Resources is expected to generate 1.65 times more return on investment than Boss Resources. However, Amarc Resources is 1.65 times more volatile than Boss Resources. It trades about 0.04 of its potential returns per unit of risk. Boss Resources is currently generating about 0.03 per unit of risk. If you would invest 11.00 in Amarc Resources on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Amarc Resources or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. Boss Resources
Performance |
| Timeline |
| Amarc Resources |
| Boss Resources |
Amarc Resources and Boss Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and Boss Resources
The main advantage of trading using opposite Amarc Resources and Boss Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, Boss Resources 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 Boss Resources will offset losses from the drop in Boss Resources' long position.The idea behind Amarc Resources and Boss Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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