Correlation Between Nine Mile and American Eagle
Can any of the company-specific risk be diversified away by investing in both Nine Mile and American Eagle 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 Nine Mile and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Mile Metals and American Eagle Gold, you can compare the effects of market volatilities on Nine Mile and American Eagle 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 Nine Mile with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Mile and American Eagle.
Diversification Opportunities for Nine Mile and American Eagle
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nine and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nine Mile Metals and American Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Gold and Nine Mile 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 Nine Mile Metals are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Gold has no effect on the direction of Nine Mile i.e., Nine Mile and American Eagle go up and down completely randomly.
Pair Corralation between Nine Mile and American Eagle
Assuming the 90 days horizon Nine Mile Metals is expected to generate 3.48 times more return on investment than American Eagle. However, Nine Mile is 3.48 times more volatile than American Eagle Gold. It trades about 0.07 of its potential returns per unit of risk. American Eagle Gold is currently generating about -0.08 per unit of risk. If you would invest 1.10 in Nine Mile Metals on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Nine Mile Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nine Mile Metals vs. American Eagle Gold
Performance |
| Timeline |
| Nine Mile Metals |
| American Eagle Gold |
Nine Mile and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Mile and American Eagle
The main advantage of trading using opposite Nine Mile and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Mile position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| Nine Mile vs. Endurance Gold | Nine Mile vs. Red Pine Exploration | Nine Mile vs. Altamira Gold Corp | Nine Mile vs. Grande Portage Resources |
| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |