Correlation Between Eastinco Mining and AMG Advanced

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

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

Diversification Opportunities for Eastinco Mining and AMG Advanced

0.5

Correlation Coefficient

Eastinco Mining  AMG Advanced

Very weak diversification

The 3 months correlation between Eastinco and AMG is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Eastinco 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 Eastinco Mining Exploration are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and AMG Advanced go up and down completely randomly.

Pair Corralation between Eastinco Mining and AMG Advanced

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 111.15 times more return on investment than AMG Advanced. However, Eastinco Mining is 111.15 times more volatile than AMG Advanced Metallurgical. It trades about 0.27 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.05 per unit of risk. If you would invest  8,500  in Eastinco Mining Exploration on October 11, 2024 and sell it today you would lose (3,800) from holding Eastinco Mining Exploration or give up 44.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Eastinco Mining Exploration  vs.  AMG Advanced Metallurgical

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMG Advanced Metallurgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Eastinco Mining and AMG Advanced

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

The idea behind Eastinco Mining Exploration and AMG Advanced Metallurgical 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.