Correlation Between Condor Resources and American Creek

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

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

Diversification Opportunities for Condor Resources and American Creek

0.28

Correlation Coefficient

Condor Resources  American Creek

Modest diversification

The 3 months correlation between Condor and American is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Condor Resources and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources and Condor 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 Condor Resources are associated (or correlated) with American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Condor Resources i.e., Condor Resources and American Creek go up and down completely randomly.

Pair Corralation between Condor Resources and American Creek

Assuming the 90 days horizon Condor Resources is expected to generate 0.8 times more return on investment than American Creek. However, Condor Resources is 1.25 times less risky than American Creek. It trades about -0.04 of its potential returns per unit of risk. American Creek Resources is currently generating about -0.16 per unit of risk. If you would invest  12.00  in Condor Resources on December 30, 2024 and sell it today you would lose (3.00) from holding Condor Resources or give up 25.0% of portfolio value over 90 days.

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

Condor Resources  vs.  American Creek Resources

Condor Resources

Risk-Adjusted Performance

Very Weak

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

American Creek Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Creek Resources 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Condor Resources and American Creek

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

The idea behind Condor Resources and American Creek 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.