Correlation Between American Manganese and Gratomic

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

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

Diversification Opportunities for American Manganese and Gratomic

-0.17

Correlation Coefficient

American Manganese  Gratomic

Good diversification

The 3 months correlation between American and Gratomic is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding American Manganese and Gratomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gratomic and American Manganese 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 Manganese are associated (or correlated) with Gratomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gratomic has no effect on the direction of American Manganese i.e., American Manganese and Gratomic go up and down completely randomly.

Pair Corralation between American Manganese and Gratomic

Assuming the 90 days horizon American Manganese is expected to generate 0.67 times more return on investment than Gratomic. However, American Manganese is 1.5 times less risky than Gratomic. It trades about 0.01 of its potential returns per unit of risk. Gratomic is currently generating about -0.01 per unit of risk. If you would invest  12.00  in American Manganese on September 12, 2024 and sell it today you would lose (1.00) from holding American Manganese or give up 8.33% of portfolio value over 90 days.

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

American Manganese  vs.  Gratomic

American Manganese

Risk-Adjusted Performance

0 of 100

Weak

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

Gratomic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gratomic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with American Manganese and Gratomic

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

The idea behind American Manganese and Gratomic 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.