Correlation Between Imperial Metals and Amerigo Resources
Can any of the company-specific risk be diversified away by investing in both Imperial Metals and Amerigo Resources 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 Imperial Metals and Amerigo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and Amerigo Resources, you can compare the effects of market volatilities on Imperial Metals and Amerigo Resources 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 Imperial Metals with a short position of Amerigo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Amerigo Resources.
Diversification Opportunities for Imperial Metals and Amerigo Resources
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Imperial and Amerigo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Amerigo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerigo Resources and Imperial 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 Imperial Metals are associated (or correlated) with Amerigo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerigo Resources has no effect on the direction of Imperial Metals i.e., Imperial Metals and Amerigo Resources go up and down completely randomly.
Pair Corralation between Imperial Metals and Amerigo Resources
Assuming the 90 days horizon Imperial Metals is expected to generate 4.76 times less return on investment than Amerigo Resources. In addition to that, Imperial Metals is 1.1 times more volatile than Amerigo Resources. It trades about 0.01 of its total potential returns per unit of risk. Amerigo Resources is currently generating about 0.07 per unit of volatility. If you would invest 82.00 in Amerigo Resources on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Amerigo Resources or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. Amerigo Resources
Performance |
| Timeline |
| Imperial Metals |
| Amerigo Resources |
Imperial Metals and Amerigo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and Amerigo Resources
The main advantage of trading using opposite Imperial Metals and Amerigo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals position performs unexpectedly, Amerigo Resources 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 Amerigo Resources will offset losses from the drop in Amerigo Resources' long position.| Imperial Metals vs. South32 Limited | Imperial Metals vs. NioCorp Developments Ltd | Imperial Metals vs. HUMANA INC | Imperial Metals vs. SCOR PK |
| Amerigo Resources vs. First Quantum Minerals | Amerigo Resources vs. Antofagasta PLC | Amerigo Resources vs. Capstone Copper Corp | Amerigo Resources vs. Copper Mountain Mining |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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