Correlation Between First American and Euro Manganese
Can any of the company-specific risk be diversified away by investing in both First American and Euro Manganese 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 First American and Euro Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Silver and Euro Manganese, you can compare the effects of market volatilities on First American and Euro Manganese 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 First American with a short position of Euro Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Euro Manganese.
Diversification Opportunities for First American and Euro Manganese
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Euro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Euro Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Manganese and First American 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 First American Silver are associated (or correlated) with Euro Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Manganese has no effect on the direction of First American i.e., First American and Euro Manganese go up and down completely randomly.
Pair Corralation between First American and Euro Manganese
Given the investment horizon of 90 days First American Silver is expected to generate 6.05 times more return on investment than Euro Manganese. However, First American is 6.05 times more volatile than Euro Manganese. It trades about 0.05 of its potential returns per unit of risk. Euro Manganese is currently generating about -0.02 per unit of risk. If you would invest 0.02 in First American Silver on August 30, 2024 and sell it today you would lose (0.01) from holding First American Silver or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Silver vs. Euro Manganese
Performance |
| Timeline |
| First American Silver |
| Euro Manganese |
First American and Euro Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Euro Manganese
The main advantage of trading using opposite First American and Euro Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Euro Manganese 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 Euro Manganese will offset losses from the drop in Euro Manganese's long position.| First American vs. Rockridge Resources | First American vs. Ameriwest Lithium | First American vs. Osisko Metals Incorporated | First American vs. Volt Lithium Corp |
| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing Resources |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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