Correlation Between Capella Minerals and American Creek
Can any of the company-specific risk be diversified away by investing in both Capella Minerals and American Creek 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 Capella Minerals and American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capella Minerals Limited and American Creek Resources, you can compare the effects of market volatilities on Capella Minerals and American Creek 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 Capella Minerals with a short position of American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capella Minerals and American Creek.
Diversification Opportunities for Capella Minerals and American Creek
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capella and American is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Capella Minerals Limited and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources and Capella Minerals 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 Capella Minerals Limited are associated (or correlated) with American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Capella Minerals i.e., Capella Minerals and American Creek go up and down completely randomly.
Pair Corralation between Capella Minerals and American Creek
Assuming the 90 days horizon Capella Minerals Limited is expected to under-perform the American Creek. In addition to that, Capella Minerals is 4.48 times more volatile than American Creek Resources. It trades about -0.28 of its total potential returns per unit of risk. American Creek Resources is currently generating about -0.13 per unit of volatility. If you would invest 19.00 in American Creek Resources on October 23, 2024 and sell it today you would lose (2.00) from holding American Creek Resources or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Capella Minerals Limited vs. American Creek Resources
Performance |
| Timeline |
| Capella Minerals |
| American Creek Resources |
Capella Minerals and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capella Minerals and American Creek
The main advantage of trading using opposite Capella Minerals and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capella Minerals position performs unexpectedly, American Creek 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 Creek will offset losses from the drop in American Creek's long position.| Capella Minerals vs. Silver Tiger Metals | Capella Minerals vs. P2 Gold | Capella Minerals vs. Integra Resources Corp | Capella Minerals vs. SilverCrest Metals |
| American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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