Correlation Between American Creek and Metallic Minerals

Can any of the company-specific risk be diversified away by investing in both American Creek and Metallic 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 Creek and Metallic Minerals 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 Metallic Minerals Corp, you can compare the effects of market volatilities on American Creek and Metallic 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 Creek with a short position of Metallic Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Metallic Minerals.

Diversification Opportunities for American Creek and Metallic Minerals

0.14

Correlation Coefficient

American Creek  Metallic Minerals

Average diversification

The 3 months correlation between American and Metallic is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Metallic Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallic Minerals Corp 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 Metallic Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallic Minerals Corp has no effect on the direction of American Creek i.e., American Creek and Metallic Minerals go up and down completely randomly.

Pair Corralation between American Creek and Metallic Minerals

Assuming the 90 days horizon American Creek Resources is expected to generate 1.25 times more return on investment than Metallic Minerals. However, American Creek is 1.25 times more volatile than Metallic Minerals Corp. It trades about 0.05 of its potential returns per unit of risk. Metallic Minerals Corp is currently generating about 0.01 per unit of risk. If you would invest  14.00  in American Creek Resources on October 7, 2024 and sell it today you would earn a total of  12.00  from holding American Creek Resources or generate 85.71% return on investment over 90 days.

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

American Creek Resources  vs.  Metallic Minerals Corp

American Creek Resources

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, American Creek is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Metallic Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metallic Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Metallic Minerals 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 Metallic Minerals

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

The idea behind American Creek Resources and Metallic 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.