Correlation Between ProAm Explorations and Newport Exploration
Can any of the company-specific risk be diversified away by investing in both ProAm Explorations and Newport Exploration 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 ProAm Explorations and Newport Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProAm Explorations Corp and Newport Exploration, you can compare the effects of market volatilities on ProAm Explorations and Newport Exploration 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 ProAm Explorations with a short position of Newport Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProAm Explorations and Newport Exploration.
Diversification Opportunities for ProAm Explorations and Newport Exploration
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProAm and Newport is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ProAm Explorations Corp and Newport Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newport Exploration and ProAm Explorations 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 ProAm Explorations Corp are associated (or correlated) with Newport Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newport Exploration has no effect on the direction of ProAm Explorations i.e., ProAm Explorations and Newport Exploration go up and down completely randomly.
Pair Corralation between ProAm Explorations and Newport Exploration
Assuming the 90 days horizon ProAm Explorations Corp is expected to generate 3.74 times more return on investment than Newport Exploration. However, ProAm Explorations is 3.74 times more volatile than Newport Exploration. It trades about 0.04 of its potential returns per unit of risk. Newport Exploration is currently generating about -0.04 per unit of risk. If you would invest 10.00 in ProAm Explorations Corp on November 9, 2024 and sell it today you would lose (7.00) from holding ProAm Explorations Corp or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProAm Explorations Corp vs. Newport Exploration
Performance |
| Timeline |
| ProAm Explorations Corp |
| Newport Exploration |
ProAm Explorations and Newport Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProAm Explorations and Newport Exploration
The main advantage of trading using opposite ProAm Explorations and Newport Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProAm Explorations position performs unexpectedly, Newport Exploration 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 Newport Exploration will offset losses from the drop in Newport Exploration's long position.| ProAm Explorations vs. Sun Peak Metals | ProAm Explorations vs. TGS Esports | ProAm Explorations vs. WELL Health Technologies | ProAm Explorations vs. NeuPath Health |
| Newport Exploration vs. McChip Resources | Newport Exploration vs. Highway 50 Gold | Newport Exploration vs. ProAm Explorations 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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