Correlation Between Eagle Plains and Commander Resources
Can any of the company-specific risk be diversified away by investing in both Eagle Plains and Commander 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 Eagle Plains and Commander Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Plains Resources and Commander Resources, you can compare the effects of market volatilities on Eagle Plains and Commander 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 Eagle Plains with a short position of Commander Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Plains and Commander Resources.
Diversification Opportunities for Eagle Plains and Commander Resources
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eagle and Commander is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Plains Resources and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander Resources and Eagle Plains 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 Eagle Plains Resources are associated (or correlated) with Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of Eagle Plains i.e., Eagle Plains and Commander Resources go up and down completely randomly.
Pair Corralation between Eagle Plains and Commander Resources
Assuming the 90 days horizon Eagle Plains Resources is expected to under-perform the Commander Resources. But the stock apears to be less risky and, when comparing its historical volatility, Eagle Plains Resources is 1.3 times less risky than Commander Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Commander Resources is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Commander Resources on September 6, 2024 and sell it today you would lose (1.00) from holding Commander Resources or give up 12.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Eagle Plains Resources vs. Commander Resources
Performance |
Timeline |
Eagle Plains Resources |
Commander Resources |
Eagle Plains and Commander Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eagle Plains and Commander Resources
The main advantage of trading using opposite Eagle Plains and Commander Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Plains position performs unexpectedly, Commander 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 Commander Resources will offset losses from the drop in Commander Resources' long position.Eagle Plains vs. Commander Resources | Eagle Plains vs. Radius Gold | Eagle Plains vs. Fjordland Exploration | Eagle Plains vs. Bitterroot Resources |
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Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |