Correlation Between Alaska Energy and Generation Mining
Can any of the company-specific risk be diversified away by investing in both Alaska Energy and Generation Mining 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 Alaska Energy and Generation Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Generation Mining, you can compare the effects of market volatilities on Alaska Energy and Generation Mining 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 Alaska Energy with a short position of Generation Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Generation Mining.
Diversification Opportunities for Alaska Energy and Generation Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and Generation is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals and Generation Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Mining and Alaska Energy 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 Alaska Energy Metals are associated (or correlated) with Generation Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Mining has no effect on the direction of Alaska Energy i.e., Alaska Energy and Generation Mining go up and down completely randomly.
Pair Corralation between Alaska Energy and Generation Mining
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Generation Mining. But the stock apears to be less risky and, when comparing its historical volatility, Alaska Energy Metals is 1.73 times less risky than Generation Mining. The stock trades about -0.09 of its potential returns per unit of risk. The Generation Mining is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Generation Mining on October 6, 2024 and sell it today you would lose (7.00) from holding Generation Mining or give up 30.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Alaska Energy Metals vs. Generation Mining
Performance |
Timeline |
Alaska Energy Metals |
Generation Mining |
Alaska Energy and Generation Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alaska Energy and Generation Mining
The main advantage of trading using opposite Alaska Energy and Generation Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy position performs unexpectedly, Generation Mining 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 Generation Mining will offset losses from the drop in Generation Mining's long position.Alaska Energy vs. Ramp Metals | Alaska Energy vs. Leading Edge Materials | Alaska Energy vs. Sun Peak Metals | Alaska Energy vs. Forsys Metals Corp |
Generation Mining vs. Clean Air Metals | Generation Mining vs. Stillwater Critical Minerals | Generation Mining vs. Troilus Gold Corp | Generation Mining vs. Silver Elephant Mining |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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