Correlation Between Metallic Minerals and American Creek
Can any of the company-specific risk be diversified away by investing in both Metallic Minerals and American Creek 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 Metallic Minerals and American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metallic Minerals Corp and American Creek Resources, you can compare the effects of market volatilities on Metallic Minerals and American Creek 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 Metallic Minerals with a short position of American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metallic Minerals and American Creek.
Diversification Opportunities for Metallic Minerals and American Creek
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metallic and American is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Metallic Minerals Corp and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources and Metallic Minerals 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 Metallic Minerals Corp are associated (or correlated) with American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Metallic Minerals i.e., Metallic Minerals and American Creek go up and down completely randomly.
Pair Corralation between Metallic Minerals and American Creek
Assuming the 90 days horizon Metallic Minerals is expected to generate 2.8 times less return on investment than American Creek. But when comparing it to its historical volatility, Metallic Minerals Corp is 1.39 times less risky than American Creek. It trades about 0.03 of its potential returns per unit of risk. American Creek Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in American Creek Resources on November 2, 2024 and sell it today you would earn a total of 4.00 from holding American Creek Resources or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metallic Minerals Corp vs. American Creek Resources
Performance |
| Timeline |
| Metallic Minerals Corp |
| American Creek Resources |
Metallic Minerals and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metallic Minerals and American Creek
The main advantage of trading using opposite Metallic Minerals and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metallic Minerals position performs unexpectedly, American Creek 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 American Creek will offset losses from the drop in American Creek's long position.| Metallic Minerals vs. Defiance Silver Corp | Metallic Minerals vs. AbraSilver Resource Corp | Metallic Minerals vs. Summa Silver Corp | Metallic Minerals vs. Honey Badger Silver |
| American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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