Correlation Between Atico Mining and Amarc Resources

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

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

Diversification Opportunities for Atico Mining and Amarc Resources

-0.27

Correlation Coefficient

Atico Mining  Amarc Resources

Very good diversification

The 3 months correlation between Atico and Amarc is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Atico Mining and Amarc Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarc Resources and Atico Mining 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 Atico Mining are associated (or correlated) with Amarc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarc Resources has no effect on the direction of Atico Mining i.e., Atico Mining and Amarc Resources go up and down completely randomly.

Pair Corralation between Atico Mining and Amarc Resources

Assuming the 90 days horizon Atico Mining is expected to generate 40.9 times less return on investment than Amarc Resources. But when comparing it to its historical volatility, Atico Mining is 6.41 times less risky than Amarc Resources. It trades about 0.04 of its potential returns per unit of risk. Amarc Resources is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Amarc Resources on October 22, 2024 and sell it today you would earn a total of  35.00  from holding Amarc Resources or generate 233.33% return on investment over 90 days.

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

Atico Mining  vs.  Amarc Resources

Atico Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atico Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Amarc Resources

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Amarc Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atico Mining and Amarc Resources

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

The idea behind Atico Mining and Amarc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.