Correlation Between First American and Rare Element
Can any of the company-specific risk be diversified away by investing in both First American and Rare Element 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 Rare Element 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 Rare Element Resources, you can compare the effects of market volatilities on First American and Rare Element 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 Rare Element. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Rare Element.
Diversification Opportunities for First American and Rare Element
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Rare is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Rare Element Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rare Element 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 Rare Element. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rare Element Resources has no effect on the direction of First American i.e., First American and Rare Element go up and down completely randomly.
Pair Corralation between First American and Rare Element
If you would invest 63.00 in Rare Element Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Rare Element Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
First American Silver vs. Rare Element Resources
Performance |
| Timeline |
| First American Silver |
| Rare Element Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First American and Rare Element Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Rare Element
The main advantage of trading using opposite First American and Rare Element positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Rare Element 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 Rare Element will offset losses from the drop in Rare Element's long position.| First American vs. Rockridge Resources | First American vs. Vital Metals Limited | First American vs. Ameriwest Lithium | First American vs. Osisko Metals Incorporated |
| Rare Element vs. Ucore Rare Metals | Rare Element vs. Lynas Rare Earths | Rare Element vs. Search Minerals | Rare Element vs. Arafura 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |