Correlation Between Euro Manganese and First American
Can any of the company-specific risk be diversified away by investing in both Euro Manganese and First American 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 Euro Manganese and First American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euro Manganese and First American Silver, you can compare the effects of market volatilities on Euro Manganese and First American 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 Euro Manganese with a short position of First American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Manganese and First American.
Diversification Opportunities for Euro Manganese and First American
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Euro and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Euro Manganese and First American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Silver and Euro Manganese 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 Euro Manganese are associated (or correlated) with First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Silver has no effect on the direction of Euro Manganese i.e., Euro Manganese and First American go up and down completely randomly.
Pair Corralation between Euro Manganese and First American
Assuming the 90 days horizon Euro Manganese is expected to under-perform the First American. But the otc stock apears to be less risky and, when comparing its historical volatility, Euro Manganese is 6.05 times less risky than First American. The otc stock trades about -0.02 of its potential returns per unit of risk. The First American Silver is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.02 in First American Silver on August 30, 2024 and sell it today you would lose (0.01) from holding First American Silver or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euro Manganese vs. First American Silver
Performance |
| Timeline |
| Euro Manganese |
| First American Silver |
Euro Manganese and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euro Manganese and First American
The main advantage of trading using opposite Euro Manganese and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euro Manganese position performs unexpectedly, First American 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 First American will offset losses from the drop in First American's long position.| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing Resources |
| First American vs. Rockridge Resources | First American vs. Ameriwest Lithium | First American vs. Osisko Metals Incorporated | First American vs. Volt Lithium 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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