Correlation Between Los Andes and Amerigo Resources
Can any of the company-specific risk be diversified away by investing in both Los Andes 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 Los Andes and Amerigo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Los Andes Copper and Amerigo Resources, you can compare the effects of market volatilities on Los Andes 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 Los Andes with a short position of Amerigo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Los Andes and Amerigo Resources.
Diversification Opportunities for Los Andes and Amerigo Resources
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Los and Amerigo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Los Andes Copper and Amerigo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerigo Resources and Los Andes 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 Los Andes Copper 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 Los Andes i.e., Los Andes and Amerigo Resources go up and down completely randomly.
Pair Corralation between Los Andes and Amerigo Resources
Assuming the 90 days horizon Los Andes Copper is expected to under-perform the Amerigo Resources. In addition to that, Los Andes is 1.43 times more volatile than Amerigo Resources. It trades about -0.05 of its total potential returns per unit of risk. Amerigo Resources is currently generating about -0.01 per unit of volatility. If you would invest 123.00 in Amerigo Resources on September 1, 2024 and sell it today you would lose (1.00) from holding Amerigo Resources or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Los Andes Copper vs. Amerigo Resources
Performance |
| Timeline |
| Los Andes Copper |
| Amerigo Resources |
Los Andes and Amerigo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Los Andes and Amerigo Resources
The main advantage of trading using opposite Los Andes and Amerigo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Los Andes 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.| Los Andes vs. South32 Limited | Los Andes vs. NioCorp Developments Ltd | Los Andes vs. HUMANA INC | Los Andes 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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