Correlation Between American CuMo and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both American CuMo and Adriatic Metals 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 CuMo and Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American CuMo Mining and Adriatic Metals PLC, you can compare the effects of market volatilities on American CuMo and Adriatic Metals 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 CuMo with a short position of Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American CuMo and Adriatic Metals.
Diversification Opportunities for American CuMo and Adriatic Metals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Adriatic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding American CuMo Mining and Adriatic Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals PLC and American CuMo 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 CuMo Mining are associated (or correlated) with Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals PLC has no effect on the direction of American CuMo i.e., American CuMo and Adriatic Metals go up and down completely randomly.
Pair Corralation between American CuMo and Adriatic Metals
Assuming the 90 days horizon American CuMo Mining is expected to under-perform the Adriatic Metals. In addition to that, American CuMo is 5.32 times more volatile than Adriatic Metals PLC. It trades about -0.03 of its total potential returns per unit of risk. Adriatic Metals PLC is currently generating about 0.12 per unit of volatility. If you would invest 234.00 in Adriatic Metals PLC on August 29, 2024 and sell it today you would earn a total of 29.00 from holding Adriatic Metals PLC or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
American CuMo Mining vs. Adriatic Metals PLC
Performance |
| Timeline |
| American CuMo Mining |
| Adriatic Metals PLC |
American CuMo and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American CuMo and Adriatic Metals
The main advantage of trading using opposite American CuMo and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American CuMo position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| American CuMo vs. Pasinex Resources Limited | American CuMo vs. Themac Resources Group | American CuMo vs. East Africa Metals | American CuMo vs. Forsys Metals Corp |
| Adriatic Metals vs. Huntsman Exploration | Adriatic Metals vs. Aurelia Metals Limited | Adriatic Metals vs. American Helium | Adriatic Metals vs. Progressive Planet Solutions |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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