Correlation Between American Pacific and First Mining
Can any of the company-specific risk be diversified away by investing in both American Pacific and First Mining 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 First Mining 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 First Mining Gold, you can compare the effects of market volatilities on American Pacific and First Mining 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 First Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Pacific and First Mining.
Diversification Opportunities for American Pacific and First Mining
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and First is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding American Pacific Mining and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining 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 First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of American Pacific i.e., American Pacific and First Mining go up and down completely randomly.
Pair Corralation between American Pacific and First Mining
Assuming the 90 days horizon American Pacific Mining is expected to generate 1.31 times more return on investment than First Mining. However, American Pacific is 1.31 times more volatile than First Mining Gold. It trades about 0.03 of its potential returns per unit of risk. First Mining Gold is currently generating about 0.02 per unit of risk. If you would invest 17.00 in American Pacific Mining on September 3, 2024 and sell it today you would earn a total of 1.00 from holding American Pacific Mining or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Pacific Mining vs. First Mining Gold
Performance |
| Timeline |
| American Pacific Mining |
| First Mining Gold |
American Pacific and First Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Pacific and First Mining
The main advantage of trading using opposite American Pacific and First Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Pacific position performs unexpectedly, First Mining 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 First Mining will offset losses from the drop in First Mining's long position.| American Pacific vs. Harmony Gold Mining | American Pacific vs. SPACE | American Pacific vs. T Rowe Price | American Pacific vs. Ampleforth |
| First Mining vs. Aurion Resources | First Mining vs. Orezone Gold Corp | First Mining vs. Rio2 Limited | First Mining vs. Norsemont Mining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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