Correlation Between American Clean and Arras Minerals

Can any of the company-specific risk be diversified away by investing in both American Clean and Arras Minerals 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 Clean and Arras Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Clean Resources and Arras Minerals Corp, you can compare the effects of market volatilities on American Clean and Arras Minerals 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 Clean with a short position of Arras Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Clean and Arras Minerals.

Diversification Opportunities for American Clean and Arras Minerals

0.0

Correlation Coefficient

American Clean  Arras Minerals

Pay attention - limited upside

The 3 months correlation between American and Arras is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Clean Resources and Arras Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arras Minerals Corp and American Clean 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 Clean Resources are associated (or correlated) with Arras Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arras Minerals Corp has no effect on the direction of American Clean i.e., American Clean and Arras Minerals go up and down completely randomly.

Pair Corralation between American Clean and Arras Minerals

If you would invest  20.00  in Arras Minerals Corp on December 29, 2024 and sell it today you would earn a total of  41.00  from holding Arras Minerals Corp or generate 205.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

American Clean Resources  vs.  Arras Minerals Corp

American Clean Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Clean Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, American Clean is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Arras Minerals Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arras Minerals Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, Arras Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Clean and Arras Minerals

The main advantage of trading using opposite American Clean and Arras Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Clean position performs unexpectedly, Arras Minerals 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 Arras Minerals will offset losses from the drop in Arras Minerals' long position.

The idea behind American Clean Resources and Arras Minerals Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.