Correlation Between Amarc Resources and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and Centaurus 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 Amarc Resources and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amarc Resources and Centaurus Metals Limited, you can compare the effects of market volatilities on Amarc Resources and Centaurus 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 Amarc Resources with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and Centaurus Metals.
Diversification Opportunities for Amarc Resources and Centaurus Metals
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amarc and Centaurus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Centaurus Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals 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 Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of Amarc Resources i.e., Amarc Resources and Centaurus Metals go up and down completely randomly.
Pair Corralation between Amarc Resources and Centaurus Metals
Assuming the 90 days horizon Amarc Resources is expected to generate 0.71 times more return on investment than Centaurus Metals. However, Amarc Resources is 1.4 times less risky than Centaurus Metals. It trades about 0.05 of its potential returns per unit of risk. Centaurus Metals Limited is currently generating about 0.01 per unit of risk. If you would invest 12.00 in Amarc Resources on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Amarc Resources or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. Centaurus Metals Limited
Performance |
| Timeline |
| Amarc Resources |
| Centaurus Metals |
Amarc Resources and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and Centaurus Metals
The main advantage of trading using opposite Amarc Resources and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, Centaurus 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.| Amarc Resources vs. Norra Metals Corp | Amarc Resources vs. ZincX Resources Corp | Amarc Resources vs. Nuinsco Resources Limited | Amarc Resources vs. South Star Battery |
| Centaurus Metals vs. Norra Metals Corp | Centaurus Metals vs. ZincX Resources Corp | Centaurus Metals vs. Nuinsco Resources Limited | Centaurus Metals vs. South Star Battery |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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