Correlation Between Brixton Metals and Amex Exploration
Can any of the company-specific risk be diversified away by investing in both Brixton Metals and Amex Exploration 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 Brixton Metals and Amex Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brixton Metals and Amex Exploration, you can compare the effects of market volatilities on Brixton Metals and Amex Exploration 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 Brixton Metals with a short position of Amex Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brixton Metals and Amex Exploration.
Diversification Opportunities for Brixton Metals and Amex Exploration
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brixton and Amex is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Brixton Metals and Amex Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amex Exploration and Brixton Metals 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 Brixton Metals are associated (or correlated) with Amex Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amex Exploration has no effect on the direction of Brixton Metals i.e., Brixton Metals and Amex Exploration go up and down completely randomly.
Pair Corralation between Brixton Metals and Amex Exploration
Assuming the 90 days horizon Brixton Metals is expected to under-perform the Amex Exploration. In addition to that, Brixton Metals is 1.03 times more volatile than Amex Exploration. It trades about -0.33 of its total potential returns per unit of risk. Amex Exploration is currently generating about 0.05 per unit of volatility. If you would invest 81.00 in Amex Exploration on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Amex Exploration or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brixton Metals vs. Amex Exploration
Performance |
| Timeline |
| Brixton Metals |
| Amex Exploration |
Brixton Metals and Amex Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brixton Metals and Amex Exploration
The main advantage of trading using opposite Brixton Metals and Amex Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brixton Metals position performs unexpectedly, Amex Exploration 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 Amex Exploration will offset losses from the drop in Amex Exploration's long position.| Brixton Metals vs. Cartier Iron Corp | Brixton Metals vs. Condor Resources | Brixton Metals vs. Monumental Minerals Corp | Brixton Metals vs. Western Alaska Minerals |
| Amex Exploration vs. Minnova Corp | Amex Exploration vs. Argo Gold | Amex Exploration vs. Advance Gold Corp | Amex Exploration vs. Blue Star Gold |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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