Correlation Between Amarc Resources and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and Imperial 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 Imperial 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 Imperial Metals, you can compare the effects of market volatilities on Amarc Resources and Imperial 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and Imperial Metals.
Diversification Opportunities for Amarc Resources and Imperial Metals
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amarc and Imperial is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of Amarc Resources i.e., Amarc Resources and Imperial Metals go up and down completely randomly.
Pair Corralation between Amarc Resources and Imperial Metals
Assuming the 90 days horizon Amarc Resources is expected to generate 2.7 times more return on investment than Imperial Metals. However, Amarc Resources is 2.7 times more volatile than Imperial Metals. It trades about 0.05 of its potential returns per unit of risk. Imperial Metals is currently generating about -0.07 per unit of risk. If you would invest 12.00 in Amarc Resources on August 26, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. Imperial Metals
Performance |
| Timeline |
| Amarc Resources |
| Imperial Metals |
Amarc Resources and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and Imperial Metals
The main advantage of trading using opposite Amarc Resources and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, Imperial 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| Amarc Resources vs. Norra Metals Corp | Amarc Resources vs. ZincX Resources Corp | Amarc Resources vs. Nuinsco Resources Limited | Amarc Resources vs. Mundoro Capital |
| Imperial Metals vs. Ascendant Resources | Imperial Metals vs. Cantex Mine Development | Imperial Metals vs. Amarc Resources | Imperial Metals vs. Sterling Metals 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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