Correlation Between Amarc Resources and Edison Cobalt
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and Edison Cobalt 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 Edison Cobalt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amarc Resources and Edison Cobalt Corp, you can compare the effects of market volatilities on Amarc Resources and Edison Cobalt 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 Edison Cobalt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and Edison Cobalt.
Diversification Opportunities for Amarc Resources and Edison Cobalt
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amarc and Edison is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Edison Cobalt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Cobalt Corp 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 Edison Cobalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Cobalt Corp has no effect on the direction of Amarc Resources i.e., Amarc Resources and Edison Cobalt go up and down completely randomly.
Pair Corralation between Amarc Resources and Edison Cobalt
Assuming the 90 days horizon Amarc Resources is expected to generate 6.95 times less return on investment than Edison Cobalt. But when comparing it to its historical volatility, Amarc Resources is 7.92 times less risky than Edison Cobalt. It trades about 0.05 of its potential returns per unit of risk. Edison Cobalt Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Edison Cobalt Corp on August 24, 2024 and sell it today you would lose (25.10) from holding Edison Cobalt Corp or give up 78.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. Edison Cobalt Corp
Performance |
| Timeline |
| Amarc Resources |
| Edison Cobalt Corp |
Amarc Resources and Edison Cobalt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and Edison Cobalt
The main advantage of trading using opposite Amarc Resources and Edison Cobalt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, Edison Cobalt 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 Edison Cobalt will offset losses from the drop in Edison Cobalt's long position.| Amarc Resources vs. Durango Resources | Amarc Resources vs. Avarone Metals | Amarc Resources vs. Pampa Metals | Amarc Resources vs. Sun Summit Minerals |
| Edison Cobalt vs. Baroyeca Gold Silver | Edison Cobalt vs. Aurelia Metals Limited | Edison Cobalt vs. China Rare Earth | Edison Cobalt vs. Champion Bear Resources |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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