Correlation Between First American and Medallion Resources
Can any of the company-specific risk be diversified away by investing in both First American and Medallion 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 First American and Medallion Resources 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 Medallion Resources, you can compare the effects of market volatilities on First American and Medallion 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 First American with a short position of Medallion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Medallion Resources.
Diversification Opportunities for First American and Medallion Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Medallion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Medallion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Resources 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 Medallion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Resources has no effect on the direction of First American i.e., First American and Medallion Resources go up and down completely randomly.
Pair Corralation between First American and Medallion Resources
If you would invest 5.13 in Medallion Resources on December 11, 2024 and sell it today you would lose (0.53) from holding Medallion Resources or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 78.14% |
| Values | Daily Returns |
First American Silver vs. Medallion Resources
Performance |
| Timeline |
| First American Silver |
| Medallion Resources |
First American and Medallion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Medallion Resources
The main advantage of trading using opposite First American and Medallion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Medallion 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 Medallion Resources will offset losses from the drop in Medallion Resources' long position.| First American vs. Australian Vanadium Limited | ||
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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