Correlation Between E79 Resources and American Manganese
Can any of the company-specific risk be diversified away by investing in both E79 Resources and American Manganese 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 E79 Resources and American Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E79 Resources Corp and American Manganese, you can compare the effects of market volatilities on E79 Resources and American Manganese 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 E79 Resources with a short position of American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of E79 Resources and American Manganese.
Diversification Opportunities for E79 Resources and American Manganese
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between E79 and American is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding E79 Resources Corp and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese and E79 Resources 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 E79 Resources Corp are associated (or correlated) with American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of E79 Resources i.e., E79 Resources and American Manganese go up and down completely randomly.
Pair Corralation between E79 Resources and American Manganese
Assuming the 90 days horizon E79 Resources Corp is expected to under-perform the American Manganese. In addition to that, E79 Resources is 2.51 times more volatile than American Manganese. It trades about -0.07 of its total potential returns per unit of risk. American Manganese is currently generating about 0.05 per unit of volatility. If you would invest 8.10 in American Manganese on August 26, 2024 and sell it today you would earn a total of 0.50 from holding American Manganese or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E79 Resources Corp vs. American Manganese
Performance |
| Timeline |
| E79 Resources Corp |
| American Manganese |
E79 Resources and American Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E79 Resources and American Manganese
The main advantage of trading using opposite E79 Resources and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E79 Resources position performs unexpectedly, American Manganese 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 Manganese will offset losses from the drop in American Manganese's long position.| E79 Resources vs. Norra Metals Corp | E79 Resources vs. Voltage Metals Corp | E79 Resources vs. Cantex Mine Development | E79 Resources vs. Amarc Resources |
| American Manganese vs. Graphano Energy | American Manganese vs. Generation Mining Limited | American Manganese vs. Northern Graphite | American Manganese vs. Western Resources 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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