Correlation Between Alpha Copper and Amarc Resources

Can any of the company-specific risk be diversified away by investing in both Alpha Copper and Amarc Resources 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 Alpha Copper and Amarc Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alpha Copper and Amarc Resources

0.08

Correlation Coefficient

Alpha Copper  Amarc Resources

Significant diversification

The 3 months correlation between Alpha and Amarc is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Copper Corp and Amarc Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarc Resources and Alpha Copper 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 Alpha Copper Corp are associated (or correlated) with Amarc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarc Resources has no effect on the direction of Alpha Copper i.e., Alpha Copper and Amarc Resources go up and down completely randomly.

Pair Corralation between Alpha Copper and Amarc Resources

Assuming the 90 days horizon Alpha Copper is expected to generate 6.18 times less return on investment than Amarc Resources. In addition to that, Alpha Copper is 1.38 times more volatile than Amarc Resources. It trades about 0.01 of its total potential returns per unit of risk. Amarc Resources is currently generating about 0.07 per unit of volatility. If you would invest  13.00  in Amarc Resources on October 7, 2024 and sell it today you would earn a total of  2.00  from holding Amarc Resources or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alpha Copper Corp  vs.  Amarc Resources

Alpha Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amarc Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Amarc Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Copper and Amarc Resources

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

The idea behind Alpha Copper Corp and Amarc Resources 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.