Correlation Between Western Alaska and Max Resource
Can any of the company-specific risk be diversified away by investing in both Western Alaska and Max Resource 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 Western Alaska and Max Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Alaska Minerals and Max Resource Corp, you can compare the effects of market volatilities on Western Alaska and Max Resource 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 Western Alaska with a short position of Max Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Alaska and Max Resource.
Diversification Opportunities for Western Alaska and Max Resource
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Max is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Western Alaska Minerals and Max Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Max Resource Corp and Western Alaska 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 Western Alaska Minerals are associated (or correlated) with Max Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Max Resource Corp has no effect on the direction of Western Alaska i.e., Western Alaska and Max Resource go up and down completely randomly.
Pair Corralation between Western Alaska and Max Resource
Assuming the 90 days horizon Western Alaska Minerals is expected to generate 0.81 times more return on investment than Max Resource. However, Western Alaska Minerals is 1.23 times less risky than Max Resource. It trades about 0.0 of its potential returns per unit of risk. Max Resource Corp is currently generating about 0.0 per unit of risk. If you would invest 100.00 in Western Alaska Minerals on August 29, 2024 and sell it today you would lose (57.00) from holding Western Alaska Minerals or give up 57.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.68% |
| Values | Daily Returns |
Western Alaska Minerals vs. Max Resource Corp
Performance |
| Timeline |
| Western Alaska Minerals |
| Max Resource Corp |
Western Alaska and Max Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Alaska and Max Resource
The main advantage of trading using opposite Western Alaska and Max Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Alaska position performs unexpectedly, Max Resource 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 Max Resource will offset losses from the drop in Max Resource's long position.| Western Alaska vs. First Tellurium Corp | Western Alaska vs. Max Resource Corp | Western Alaska vs. P2 Gold | Western Alaska vs. CMC Metals |
| Max Resource vs. Western Alaska Minerals | Max Resource vs. P2 Gold | Max Resource vs. CMC Metals | Max Resource vs. GoGold Resources |
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.
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