Correlation Between Amerigo Resources and Arizona Metals

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

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

Diversification Opportunities for Amerigo Resources and Arizona Metals

-0.46

Correlation Coefficient

Amerigo Resources  Arizona Metals

Very good diversification

The 3 months correlation between Amerigo and Arizona is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Amerigo Resources and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals Corp and Amerigo 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 Amerigo Resources are associated (or correlated) with Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Amerigo Resources i.e., Amerigo Resources and Arizona Metals go up and down completely randomly.

Pair Corralation between Amerigo Resources and Arizona Metals

Assuming the 90 days trading horizon Amerigo Resources is expected to generate 0.49 times more return on investment than Arizona Metals. However, Amerigo Resources is 2.06 times less risky than Arizona Metals. It trades about 0.07 of its potential returns per unit of risk. Arizona Metals Corp is currently generating about -0.14 per unit of risk. If you would invest  169.00  in Amerigo Resources on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Amerigo Resources or generate 7.1% return on investment over 90 days.

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

Amerigo Resources  vs.  Arizona Metals Corp

Amerigo Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amerigo Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Amerigo Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Arizona Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arizona Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Amerigo Resources and Arizona Metals

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

The idea behind Amerigo Resources and Arizona Metals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.