Correlation Between American Creek and Grande Portage

Can any of the company-specific risk be diversified away by investing in both American Creek and Grande Portage 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 Grande Portage 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 Grande Portage Resources, you can compare the effects of market volatilities on American Creek and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Grande Portage.

Diversification Opportunities for American Creek and Grande Portage

0.0

Correlation Coefficient

American Creek  Grande Portage

Pay attention - limited upside

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

Pair Corralation between American Creek and Grande Portage

Assuming the 90 days horizon American Creek Resources is expected to under-perform the Grande Portage. In addition to that, American Creek is 1.24 times more volatile than Grande Portage Resources. It trades about -0.21 of its total potential returns per unit of risk. Grande Portage Resources is currently generating about 0.01 per unit of volatility. If you would invest  19.00  in Grande Portage Resources on December 30, 2024 and sell it today you would lose (1.00) from holding Grande Portage Resources or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

American Creek Resources  vs.  Grande Portage Resources

American Creek Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Creek Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Grande Portage Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grande Portage Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grande Portage is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with American Creek and Grande Portage

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

The idea behind American Creek Resources and Grande Portage 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.