Correlation Between American CuMo and Commander Resources
Can any of the company-specific risk be diversified away by investing in both American CuMo and Commander 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 American CuMo and Commander Resources 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 Commander Resources, you can compare the effects of market volatilities on American CuMo and Commander 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 American CuMo with a short position of Commander Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American CuMo and Commander Resources.
Diversification Opportunities for American CuMo and Commander Resources
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Commander is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding American CuMo Mining and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander Resources 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 Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of American CuMo i.e., American CuMo and Commander Resources go up and down completely randomly.
Pair Corralation between American CuMo and Commander Resources
If you would invest 5.00 in Commander Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Commander Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
American CuMo Mining vs. Commander Resources
Performance |
| Timeline |
| American CuMo Mining |
| Commander Resources |
American CuMo and Commander Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American CuMo and Commander Resources
The main advantage of trading using opposite American CuMo and Commander Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American CuMo position performs unexpectedly, Commander 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 Commander Resources will offset losses from the drop in Commander Resources' 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 |
| Commander Resources vs. Themac Resources Group | Commander Resources vs. East Africa Metals | Commander Resources vs. Forsys Metals Corp | Commander Resources vs. American CuMo 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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