Correlation Between American Hotel and Metalero Mining
Can any of the company-specific risk be diversified away by investing in both American Hotel and Metalero Mining 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 American Hotel and Metalero Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Metalero Mining Corp, you can compare the effects of market volatilities on American Hotel and Metalero Mining 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 American Hotel with a short position of Metalero Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Metalero Mining.
Diversification Opportunities for American Hotel and Metalero Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Metalero is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Metalero Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalero Mining Corp and American Hotel 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 American Hotel Income are associated (or correlated) with Metalero Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalero Mining Corp has no effect on the direction of American Hotel i.e., American Hotel and Metalero Mining go up and down completely randomly.
Pair Corralation between American Hotel and Metalero Mining
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Metalero Mining. In addition to that, American Hotel is 1.35 times more volatile than Metalero Mining Corp. It trades about -0.44 of its total potential returns per unit of risk. Metalero Mining Corp is currently generating about -0.31 per unit of volatility. If you would invest 16.00 in Metalero Mining Corp on September 12, 2024 and sell it today you would lose (2.00) from holding Metalero Mining Corp or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Hotel Income vs. Metalero Mining Corp
Performance |
| Timeline |
| American Hotel Income |
| Metalero Mining Corp |
American Hotel and Metalero Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Metalero Mining
The main advantage of trading using opposite American Hotel and Metalero Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Metalero Mining 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 Metalero Mining will offset losses from the drop in Metalero Mining's long position.| American Hotel vs. InterRent Real Estate | American Hotel vs. Canadian Apartment Properties | American Hotel vs. Granite Real Estate | American Hotel vs. Crombie Real Estate |
| Metalero Mining vs. NeXGold Mining Corp | Metalero Mining vs. Data Communications Management | Metalero Mining vs. Sangoma Technologies Corp | Metalero Mining vs. Dream Industrial Real |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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