Correlation Between American Helium and Applied Minerals

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

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

Diversification Opportunities for American Helium and Applied Minerals

0.0

Correlation Coefficient

American Helium  Applied Minerals

Pay attention - limited upside

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

Pair Corralation between American Helium and Applied Minerals

If you would invest  11.00  in American Helium on December 30, 2024 and sell it today you would earn a total of  2.00  from holding American Helium or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

American Helium  vs.  Applied Minerals

American Helium

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Helium are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, American Helium reported solid returns over the last few months and may actually be approaching a breakup point.

Applied Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applied Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Applied Minerals is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with American Helium and Applied Minerals

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

The idea behind American Helium and Applied Minerals 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.