Correlation Between American Pacific and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both American Pacific and Aurion 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 American Pacific and Aurion Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Pacific Mining and Aurion Resources, you can compare the effects of market volatilities on American Pacific and Aurion 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 American Pacific with a short position of Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Pacific and Aurion Resources.
Diversification Opportunities for American Pacific and Aurion Resources
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Aurion is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding American Pacific Mining and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources and American Pacific 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 American Pacific Mining are associated (or correlated) with Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of American Pacific i.e., American Pacific and Aurion Resources go up and down completely randomly.
Pair Corralation between American Pacific and Aurion Resources
Assuming the 90 days horizon American Pacific Mining is expected to generate 2.67 times more return on investment than Aurion Resources. However, American Pacific is 2.67 times more volatile than Aurion Resources. It trades about 0.18 of its potential returns per unit of risk. Aurion Resources is currently generating about -0.06 per unit of risk. If you would invest 11.00 in American Pacific Mining on August 25, 2024 and sell it today you would earn a total of 8.00 from holding American Pacific Mining or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Pacific Mining vs. Aurion Resources
Performance |
| Timeline |
| American Pacific Mining |
| Aurion Resources |
American Pacific and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Pacific and Aurion Resources
The main advantage of trading using opposite American Pacific and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Pacific position performs unexpectedly, Aurion 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| American Pacific vs. Aurion Resources | American Pacific vs. Liberty Gold Corp | American Pacific vs. Rio2 Limited | American Pacific vs. Orezone Gold Corp |
| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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