Correlation Between Giga Metals and American Rare
Can any of the company-specific risk be diversified away by investing in both Giga Metals and American Rare 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 Giga Metals and American Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giga Metals and American Rare Earths, you can compare the effects of market volatilities on Giga Metals and American Rare 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 Giga Metals with a short position of American Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Metals and American Rare.
Diversification Opportunities for Giga Metals and American Rare
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Giga and American is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Giga Metals and American Rare Earths in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Rare Earths and Giga Metals 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 Giga Metals are associated (or correlated) with American Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Rare Earths has no effect on the direction of Giga Metals i.e., Giga Metals and American Rare go up and down completely randomly.
Pair Corralation between Giga Metals and American Rare
If you would invest 18.00 in American Rare Earths on November 5, 2024 and sell it today you would earn a total of 1.00 from holding American Rare Earths or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Giga Metals vs. American Rare Earths
Performance |
| Timeline |
| Giga Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Rare Earths |
Giga Metals and American Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giga Metals and American Rare
The main advantage of trading using opposite Giga Metals and American Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Metals position performs unexpectedly, American Rare 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 Rare will offset losses from the drop in American Rare's long position.| Giga Metals vs. Canada Nickel | Giga Metals vs. Giga Metals Corp | Giga Metals vs. Talon Metals Corp | Giga Metals vs. FPX Nickel Corp |
| American Rare vs. Aurelia Metals Limited | American Rare vs. Artemis Resources | American Rare vs. Ascendant Resources | American Rare vs. Azimut Exploration |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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