Correlation Between Scottie Resources and Western Alaska
Can any of the company-specific risk be diversified away by investing in both Scottie Resources and Western Alaska 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 Scottie Resources and Western Alaska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottie Resources Corp and Western Alaska Minerals, you can compare the effects of market volatilities on Scottie Resources and Western Alaska 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 Scottie Resources with a short position of Western Alaska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and Western Alaska.
Diversification Opportunities for Scottie Resources and Western Alaska
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scottie and Western is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp and Western Alaska Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alaska Minerals and Scottie Resources 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 Scottie Resources Corp are associated (or correlated) with Western Alaska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alaska Minerals has no effect on the direction of Scottie Resources i.e., Scottie Resources and Western Alaska go up and down completely randomly.
Pair Corralation between Scottie Resources and Western Alaska
Assuming the 90 days horizon Scottie Resources Corp is expected to generate 0.81 times more return on investment than Western Alaska. However, Scottie Resources Corp is 1.24 times less risky than Western Alaska. It trades about 0.02 of its potential returns per unit of risk. Western Alaska Minerals is currently generating about 0.01 per unit of risk. If you would invest 13.00 in Scottie Resources Corp on September 1, 2024 and sell it today you would lose (1.00) from holding Scottie Resources Corp or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Scottie Resources Corp vs. Western Alaska Minerals
Performance |
| Timeline |
| Scottie Resources Corp |
| Western Alaska Minerals |
Scottie Resources and Western Alaska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottie Resources and Western Alaska
The main advantage of trading using opposite Scottie Resources and Western Alaska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottie Resources position performs unexpectedly, Western Alaska 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 Western Alaska will offset losses from the drop in Western Alaska's long position.| Scottie Resources vs. Defiance Silver Corp | Scottie Resources vs. HUMANA INC | Scottie Resources vs. SCOR PK | Scottie Resources vs. Aquagold International |
| Western Alaska vs. First Tellurium Corp | Western Alaska vs. Max Resource Corp | Western Alaska vs. P2 Gold | Western Alaska vs. CMC Metals |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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