Correlation Between New Age and Ascendant Resources
Can any of the company-specific risk be diversified away by investing in both New Age and Ascendant 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 New Age and Ascendant Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Age Metals and Ascendant Resources, you can compare the effects of market volatilities on New Age and Ascendant 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 New Age with a short position of Ascendant Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Age and Ascendant Resources.
Diversification Opportunities for New Age and Ascendant Resources
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Ascendant is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding New Age Metals and Ascendant Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendant Resources and New Age 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 New Age Metals are associated (or correlated) with Ascendant Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendant Resources has no effect on the direction of New Age i.e., New Age and Ascendant Resources go up and down completely randomly.
Pair Corralation between New Age and Ascendant Resources
Assuming the 90 days horizon New Age is expected to generate 1.02 times less return on investment than Ascendant Resources. But when comparing it to its historical volatility, New Age Metals is 1.03 times less risky than Ascendant Resources. It trades about 0.07 of its potential returns per unit of risk. Ascendant Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Ascendant Resources on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Ascendant Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
New Age Metals vs. Ascendant Resources
Performance |
| Timeline |
| New Age Metals |
| Ascendant Resources |
New Age and Ascendant Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Age and Ascendant Resources
The main advantage of trading using opposite New Age and Ascendant Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Age position performs unexpectedly, Ascendant 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 Ascendant Resources will offset losses from the drop in Ascendant Resources' long position.| New Age vs. Silver Hammer Mining | New Age vs. Reyna Silver Corp | New Age vs. Guanajuato Silver | New Age vs. Silver One Resources |
| Ascendant Resources vs. Ameriwest Lithium | Ascendant Resources vs. Osisko Metals Incorporated | Ascendant Resources vs. Volt Lithium 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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