Correlation Between Diamond Fields and American Creek
Can any of the company-specific risk be diversified away by investing in both Diamond Fields 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 Diamond Fields and American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Fields Resources and American Creek Resources, you can compare the effects of market volatilities on Diamond Fields 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 Diamond Fields with a short position of American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Fields and American Creek.
Diversification Opportunities for Diamond Fields and American Creek
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamond and American is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Fields Resources 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 Diamond Fields 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 Diamond Fields Resources 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 Diamond Fields i.e., Diamond Fields and American Creek go up and down completely randomly.
Pair Corralation between Diamond Fields and American Creek
Assuming the 90 days horizon Diamond Fields Resources is expected to under-perform the American Creek. But the stock apears to be less risky and, when comparing its historical volatility, Diamond Fields Resources is 1.01 times less risky than American Creek. The stock trades about 0.0 of its potential returns per unit of risk. The American Creek Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12.00 in American Creek Resources on November 28, 2024 and sell it today you would earn a total of 1.00 from holding American Creek Resources or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Fields Resources vs. American Creek Resources
Performance |
| Timeline |
| Diamond Fields Resources |
| American Creek Resources |
Diamond Fields and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Fields and American Creek
The main advantage of trading using opposite Diamond Fields and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Fields 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.| Diamond Fields vs. Capstone Mining Corp | Diamond Fields vs. Summa Silver Corp | Diamond Fields vs. McEwen Mining | Diamond Fields vs. Micron Technology, |
| American Creek vs. Teuton Resources Corp | American Creek vs. Kore Mining | American Creek vs. Endurance Gold Corp | American Creek vs. Strikepoint Gold |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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