Correlation Between American CuMo and East Africa
Can any of the company-specific risk be diversified away by investing in both American CuMo and East Africa 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 East Africa 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 East Africa Metals, you can compare the effects of market volatilities on American CuMo and East Africa 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 East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of American CuMo and East Africa.
Diversification Opportunities for American CuMo and East Africa
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and East is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding American CuMo Mining and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals 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 East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of American CuMo i.e., American CuMo and East Africa go up and down completely randomly.
Pair Corralation between American CuMo and East Africa
If you would invest 11.00 in East Africa Metals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding East Africa Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
American CuMo Mining vs. East Africa Metals
Performance |
| Timeline |
| American CuMo Mining |
| East Africa Metals |
American CuMo and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American CuMo and East Africa
The main advantage of trading using opposite American CuMo and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American CuMo position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's 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 |
| East Africa vs. Silver Hammer Mining | East Africa vs. Reyna Silver Corp | East Africa vs. Guanajuato Silver | East Africa vs. Silver One Resources |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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