Correlation Between Amarc Resources and Global Helium

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

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

Diversification Opportunities for Amarc Resources and Global Helium

-0.37

Correlation Coefficient

Amarc Resources  Global Helium

Very good diversification

The 3 months correlation between Amarc and Global is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Global Helium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Helium Corp and Amarc 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 Amarc Resources are associated (or correlated) with Global Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Helium Corp has no effect on the direction of Amarc Resources i.e., Amarc Resources and Global Helium go up and down completely randomly.

Pair Corralation between Amarc Resources and Global Helium

Assuming the 90 days horizon Amarc Resources is expected to generate 0.45 times more return on investment than Global Helium. However, Amarc Resources is 2.22 times less risky than Global Helium. It trades about 0.12 of its potential returns per unit of risk. Global Helium Corp is currently generating about 0.01 per unit of risk. If you would invest  10.00  in Amarc Resources on September 4, 2024 and sell it today you would earn a total of  4.00  from holding Amarc Resources or generate 40.0% return on investment over 90 days.

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

Amarc Resources  vs.  Global Helium Corp

Amarc Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 9 (%) 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.

Global Helium Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Helium Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Helium may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amarc Resources and Global Helium

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

The idea behind Amarc Resources and Global Helium 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.