Correlation Between Eskay Mining and American Helium
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and American Helium 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 Eskay Mining and American Helium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eskay Mining Corp and American Helium, you can compare the effects of market volatilities on Eskay Mining and American Helium 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 Eskay Mining with a short position of American Helium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and American Helium.
Diversification Opportunities for Eskay Mining and American Helium
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eskay and American is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and American Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Helium and Eskay Mining 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 Eskay Mining Corp are associated (or correlated) with American Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Helium has no effect on the direction of Eskay Mining i.e., Eskay Mining and American Helium go up and down completely randomly.
Pair Corralation between Eskay Mining and American Helium
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the American Helium. In addition to that, Eskay Mining is 2.12 times more volatile than American Helium. It trades about -0.15 of its total potential returns per unit of risk. American Helium is currently generating about 0.21 per unit of volatility. If you would invest 10.00 in American Helium on August 25, 2024 and sell it today you would earn a total of 1.00 from holding American Helium or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. American Helium
Performance |
| Timeline |
| Eskay Mining Corp |
| American Helium |
Eskay Mining and American Helium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and American Helium
The main advantage of trading using opposite Eskay Mining and American Helium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, American Helium 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 Helium will offset losses from the drop in American Helium's long position.| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
| American Helium vs. Norra Metals Corp | American Helium vs. ZincX Resources Corp | American Helium vs. Nuinsco Resources Limited | American Helium vs. South Star Battery |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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