Correlation Between Amarc Resources and Sienna Resources
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and Sienna 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 Sienna 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 Sienna Resources, you can compare the effects of market volatilities on Amarc Resources and Sienna 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 Sienna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and Sienna Resources.
Diversification Opportunities for Amarc Resources and Sienna Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amarc and Sienna is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Sienna Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna 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 Sienna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Resources has no effect on the direction of Amarc Resources i.e., Amarc Resources and Sienna Resources go up and down completely randomly.
Pair Corralation between Amarc Resources and Sienna Resources
Assuming the 90 days horizon Amarc Resources is expected to generate 1.26 times less return on investment than Sienna Resources. But when comparing it to its historical volatility, Amarc Resources is 1.39 times less risky than Sienna Resources. It trades about 0.04 of its potential returns per unit of risk. Sienna Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Sienna Resources on August 30, 2024 and sell it today you would lose (0.80) from holding Sienna Resources or give up 26.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. Sienna Resources
Performance |
| Timeline |
| Amarc Resources |
| Sienna Resources |
Amarc Resources and Sienna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and Sienna Resources
The main advantage of trading using opposite Amarc Resources and Sienna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, Sienna 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 Sienna Resources will offset losses from the drop in Sienna Resources' long position.| Amarc Resources vs. Durango Resources | Amarc Resources vs. Avarone Metals | Amarc Resources vs. Pampa Metals | Amarc Resources vs. Sun Summit Minerals |
| Sienna Resources vs. Norra Metals Corp | Sienna Resources vs. E79 Resources Corp | Sienna Resources vs. Voltage Metals Corp | Sienna Resources vs. Cantex Mine Development |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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