Correlation Between Magellan Gold and Clean Air
Can any of the company-specific risk be diversified away by investing in both Magellan Gold and Clean Air 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 Magellan Gold and Clean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magellan Gold Corp and Clean Air Metals, you can compare the effects of market volatilities on Magellan Gold and Clean Air 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 Magellan Gold with a short position of Clean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Gold and Clean Air.
Diversification Opportunities for Magellan Gold and Clean Air
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magellan and Clean is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Gold Corp and Clean Air Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Air Metals and Magellan Gold 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 Magellan Gold Corp are associated (or correlated) with Clean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Air Metals has no effect on the direction of Magellan Gold i.e., Magellan Gold and Clean Air go up and down completely randomly.
Pair Corralation between Magellan Gold and Clean Air
Given the investment horizon of 90 days Magellan Gold Corp is expected to under-perform the Clean Air. But the pink sheet apears to be less risky and, when comparing its historical volatility, Magellan Gold Corp is 1.73 times less risky than Clean Air. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Clean Air Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.60 in Clean Air Metals on August 25, 2024 and sell it today you would earn a total of 0.29 from holding Clean Air Metals or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magellan Gold Corp vs. Clean Air Metals
Performance |
| Timeline |
| Magellan Gold Corp |
| Clean Air Metals |
Magellan Gold and Clean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magellan Gold and Clean Air
The main advantage of trading using opposite Magellan Gold and Clean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Gold position performs unexpectedly, Clean Air 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 Clean Air will offset losses from the drop in Clean Air's long position.| Magellan Gold vs. Clean Air Metals | Magellan Gold vs. Morningstar Unconstrained Allocation | Magellan Gold vs. High Yield Municipal Fund | Magellan Gold vs. Knife River |
| Clean Air vs. Alien Metals | Clean Air vs. Cartier Iron Corp | Clean Air vs. Arctic Star Exploration | Clean Air vs. Capella Minerals Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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