Correlation Between Amarc Resources and St-Georges Eco-Mining
Can any of the company-specific risk be diversified away by investing in both Amarc Resources and St-Georges Eco-Mining 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 St-Georges Eco-Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amarc Resources and St Georges Eco Mining Corp, you can compare the effects of market volatilities on Amarc Resources and St-Georges Eco-Mining 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 St-Georges Eco-Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amarc Resources and St-Georges Eco-Mining.
Diversification Opportunities for Amarc Resources and St-Georges Eco-Mining
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amarc and St-Georges is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and St Georges Eco Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St-Georges Eco-Mining 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 St-Georges Eco-Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St-Georges Eco-Mining has no effect on the direction of Amarc Resources i.e., Amarc Resources and St-Georges Eco-Mining go up and down completely randomly.
Pair Corralation between Amarc Resources and St-Georges Eco-Mining
Assuming the 90 days horizon Amarc Resources is expected to generate 3.34 times less return on investment than St-Georges Eco-Mining. But when comparing it to its historical volatility, Amarc Resources is 2.11 times less risky than St-Georges Eco-Mining. It trades about 0.03 of its potential returns per unit of risk. St Georges Eco Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.60 in St Georges Eco Mining Corp on August 29, 2024 and sell it today you would lose (0.06) from holding St Georges Eco Mining Corp or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amarc Resources vs. St Georges Eco Mining Corp
Performance |
| Timeline |
| Amarc Resources |
| St-Georges Eco-Mining |
Amarc Resources and St-Georges Eco-Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amarc Resources and St-Georges Eco-Mining
The main advantage of trading using opposite Amarc Resources and St-Georges Eco-Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amarc Resources position performs unexpectedly, St-Georges Eco-Mining 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 St-Georges Eco-Mining will offset losses from the drop in St-Georges Eco-Mining's long position.The idea behind Amarc Resources and St Georges Eco Mining Corp 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.| St-Georges Eco-Mining vs. Applied Minerals | St-Georges Eco-Mining vs. Artemis Resources | St-Georges Eco-Mining vs. Atco Mining | St-Georges Eco-Mining vs. American Lithium Minerals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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