Correlation Between American Creek and Petra Diamonds
Can any of the company-specific risk be diversified away by investing in both American Creek and Petra Diamonds 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 Creek and Petra Diamonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Creek Resources and Petra Diamonds Limited, you can compare the effects of market volatilities on American Creek and Petra Diamonds 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 Creek with a short position of Petra Diamonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Petra Diamonds.
Diversification Opportunities for American Creek and Petra Diamonds
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Petra is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Petra Diamonds Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petra Diamonds and American Creek 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 Creek Resources are associated (or correlated) with Petra Diamonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petra Diamonds has no effect on the direction of American Creek i.e., American Creek and Petra Diamonds go up and down completely randomly.
Pair Corralation between American Creek and Petra Diamonds
Assuming the 90 days horizon American Creek Resources is expected to under-perform the Petra Diamonds. In addition to that, American Creek is 3.09 times more volatile than Petra Diamonds Limited. It trades about -0.16 of its total potential returns per unit of risk. Petra Diamonds Limited is currently generating about -0.04 per unit of volatility. If you would invest 35.00 in Petra Diamonds Limited on December 5, 2024 and sell it today you would lose (3.00) from holding Petra Diamonds Limited or give up 8.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 93.65% |
Values | Daily Returns |
American Creek Resources vs. Petra Diamonds Limited
Performance |
Timeline |
American Creek Resources |
Petra Diamonds |
American Creek and Petra Diamonds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Creek and Petra Diamonds
The main advantage of trading using opposite American Creek and Petra Diamonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Petra Diamonds 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 Petra Diamonds will offset losses from the drop in Petra Diamonds' long position.American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
Petra Diamonds vs. Northam Platinum Holdings | Petra Diamonds vs. Clifton Mining Co | Petra Diamonds vs. Cartier Iron Corp | Petra Diamonds vs. Alien Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Stocks Directory Find actively traded stocks across global markets | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |