Correlation Between Namibia Critical and American CuMo
Can any of the company-specific risk be diversified away by investing in both Namibia Critical and American CuMo 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 Namibia Critical and American CuMo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namibia Critical Metals and American CuMo Mining, you can compare the effects of market volatilities on Namibia Critical and American CuMo 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 Namibia Critical with a short position of American CuMo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namibia Critical and American CuMo.
Diversification Opportunities for Namibia Critical and American CuMo
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Namibia and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Namibia Critical Metals and American CuMo Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American CuMo Mining and Namibia Critical 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 Namibia Critical Metals are associated (or correlated) with American CuMo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American CuMo Mining has no effect on the direction of Namibia Critical i.e., Namibia Critical and American CuMo go up and down completely randomly.
Pair Corralation between Namibia Critical and American CuMo
Assuming the 90 days horizon Namibia Critical Metals is expected to generate 0.54 times more return on investment than American CuMo. However, Namibia Critical Metals is 1.86 times less risky than American CuMo. It trades about -0.03 of its potential returns per unit of risk. American CuMo Mining is currently generating about -0.22 per unit of risk. If you would invest 2.49 in Namibia Critical Metals on August 29, 2024 and sell it today you would lose (0.28) from holding Namibia Critical Metals or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Namibia Critical Metals vs. American CuMo Mining
Performance |
| Timeline |
| Namibia Critical Metals |
| American CuMo Mining |
Namibia Critical and American CuMo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namibia Critical and American CuMo
The main advantage of trading using opposite Namibia Critical and American CuMo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namibia Critical position performs unexpectedly, American CuMo 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 CuMo will offset losses from the drop in American CuMo's long position.| Namibia Critical vs. Silver Hammer Mining | Namibia Critical vs. Reyna Silver Corp | Namibia Critical vs. Guanajuato Silver | Namibia Critical vs. Silver One Resources |
| American CuMo vs. Pasinex Resources Limited | American CuMo vs. Themac Resources Group | American CuMo vs. East Africa Metals | American CuMo vs. Forsys Metals 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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