Correlation Between Puma Exploration and East Africa
Can any of the company-specific risk be diversified away by investing in both Puma Exploration 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 Puma Exploration and East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and East Africa Metals, you can compare the effects of market volatilities on Puma Exploration 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 Puma Exploration with a short position of East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and East Africa.
Diversification Opportunities for Puma Exploration and East Africa
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puma and East is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration 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 Puma Exploration 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 Puma Exploration 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 Puma Exploration i.e., Puma Exploration and East Africa go up and down completely randomly.
Pair Corralation between Puma Exploration and East Africa
If you would invest 11.00 in East Africa Metals on September 23, 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 | 95.45% |
| Values | Daily Returns |
Puma Exploration vs. East Africa Metals
Performance |
| Timeline |
| Puma Exploration |
| East Africa Metals |
Puma Exploration and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and East Africa
The main advantage of trading using opposite Puma Exploration and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration 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.| Puma Exploration vs. Sixty North Gold | Puma Exploration vs. Red Pine Exploration | Puma Exploration vs. Grande Portage Resources | Puma Exploration vs. Altamira Gold Corp |
| East Africa vs. Puma Exploration | East Africa vs. Sixty North Gold | East Africa vs. Red Pine Exploration | East Africa vs. Grande Portage 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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