Correlation Between Angkor Resources and Avrupa Minerals

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

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

Diversification Opportunities for Angkor Resources and Avrupa Minerals

0.49

Correlation Coefficient

Angkor Resources  Avrupa Minerals

Very weak diversification

The 3 months correlation between Angkor and Avrupa is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Angkor Resources Corp and Avrupa Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avrupa Minerals and Angkor Resources 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 Angkor Resources Corp are associated (or correlated) with Avrupa Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avrupa Minerals has no effect on the direction of Angkor Resources i.e., Angkor Resources and Avrupa Minerals go up and down completely randomly.

Pair Corralation between Angkor Resources and Avrupa Minerals

Assuming the 90 days horizon Angkor Resources Corp is expected to generate 0.71 times more return on investment than Avrupa Minerals. However, Angkor Resources Corp is 1.42 times less risky than Avrupa Minerals. It trades about -0.04 of its potential returns per unit of risk. Avrupa Minerals is currently generating about -0.38 per unit of risk. If you would invest  9.50  in Angkor Resources Corp on September 23, 2024 and sell it today you would lose (0.50) from holding Angkor Resources Corp or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Angkor Resources Corp  vs.  Avrupa Minerals

Angkor Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Avrupa Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avrupa Minerals 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Angkor Resources and Avrupa Minerals

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

The idea behind Angkor Resources Corp and Avrupa 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.