Correlation Between American Pacific and Big Ridge
Can any of the company-specific risk be diversified away by investing in both American Pacific and Big Ridge 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 Big Ridge 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 Big Ridge Gold, you can compare the effects of market volatilities on American Pacific and Big Ridge 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 Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Pacific and Big Ridge.
Diversification Opportunities for American Pacific and Big Ridge
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Big is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding American Pacific Mining and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold 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 Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of American Pacific i.e., American Pacific and Big Ridge go up and down completely randomly.
Pair Corralation between American Pacific and Big Ridge
Assuming the 90 days horizon American Pacific Mining is expected to generate 0.63 times more return on investment than Big Ridge. However, American Pacific Mining is 1.58 times less risky than Big Ridge. It trades about -0.03 of its potential returns per unit of risk. Big Ridge Gold is currently generating about -0.15 per unit of risk. If you would invest 15.00 in American Pacific Mining on November 3, 2024 and sell it today you would lose (1.00) from holding American Pacific Mining or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Pacific Mining vs. Big Ridge Gold
Performance |
| Timeline |
| American Pacific Mining |
| Big Ridge Gold |
American Pacific and Big Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Pacific and Big Ridge
The main advantage of trading using opposite American Pacific and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Pacific position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.| American Pacific vs. Westward Gold | American Pacific vs. Heliostar Metals | American Pacific vs. Revival Gold | American Pacific vs. Cabral Gold |
| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |