Correlation Between American Pacific and Northern Superior
Can any of the company-specific risk be diversified away by investing in both American Pacific and Northern Superior 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 Northern Superior 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 Northern Superior Resources, you can compare the effects of market volatilities on American Pacific and Northern Superior 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 Northern Superior. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Pacific and Northern Superior.
Diversification Opportunities for American Pacific and Northern Superior
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Northern is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding American Pacific Mining and Northern Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Superior 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 Northern Superior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Superior has no effect on the direction of American Pacific i.e., American Pacific and Northern Superior go up and down completely randomly.
Pair Corralation between American Pacific and Northern Superior
Assuming the 90 days horizon American Pacific is expected to generate 1.38 times less return on investment than Northern Superior. In addition to that, American Pacific is 1.5 times more volatile than Northern Superior Resources. It trades about 0.01 of its total potential returns per unit of risk. Northern Superior Resources is currently generating about 0.02 per unit of volatility. If you would invest 36.00 in Northern Superior Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Northern Superior Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
American Pacific Mining vs. Northern Superior Resources
Performance |
| Timeline |
| American Pacific Mining |
| Northern Superior |
American Pacific and Northern Superior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Pacific and Northern Superior
The main advantage of trading using opposite American Pacific and Northern Superior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Pacific position performs unexpectedly, Northern Superior 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 Northern Superior will offset losses from the drop in Northern Superior's long position.| American Pacific vs. Westward Gold | American Pacific vs. Heliostar Metals | American Pacific vs. Revival Gold | American Pacific vs. Cabral Gold |
| Northern Superior vs. Antioquia Gold | Northern Superior vs. Radisson Mining Resources | Northern Superior vs. Asante Gold | Northern Superior vs. Baru Gold Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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