Correlation Between Champion Bear and American Helium
Can any of the company-specific risk be diversified away by investing in both Champion Bear and American Helium 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 Champion Bear and American Helium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Bear Resources and American Helium, you can compare the effects of market volatilities on Champion Bear and American Helium 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 Champion Bear with a short position of American Helium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and American Helium.
Diversification Opportunities for Champion Bear and American Helium
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and American is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and American Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Helium and Champion Bear 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 Champion Bear Resources are associated (or correlated) with American Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Helium has no effect on the direction of Champion Bear i.e., Champion Bear and American Helium go up and down completely randomly.
Pair Corralation between Champion Bear and American Helium
Assuming the 90 days horizon Champion Bear Resources is expected to under-perform the American Helium. In addition to that, Champion Bear is 3.97 times more volatile than American Helium. It trades about -0.07 of its total potential returns per unit of risk. American Helium is currently generating about 0.21 per unit of volatility. If you would invest 10.00 in American Helium on August 24, 2024 and sell it today you would earn a total of 1.00 from holding American Helium or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Bear Resources vs. American Helium
Performance |
| Timeline |
| Champion Bear Resources |
| American Helium |
Champion Bear and American Helium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and American Helium
The main advantage of trading using opposite Champion Bear and American Helium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, American Helium 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 American Helium will offset losses from the drop in American Helium's long position.| Champion Bear vs. Norra Metals Corp | Champion Bear vs. Amarc Resources | Champion Bear vs. ZincX Resources Corp | Champion Bear vs. Nuinsco Resources Limited |
| American Helium vs. Norra Metals Corp | American Helium vs. Amarc Resources | American Helium vs. ZincX Resources Corp | American Helium vs. Nuinsco Resources Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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