Correlation Between Revival Gold and American Pacific

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

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

Diversification Opportunities for Revival Gold and American Pacific

-0.44

Correlation Coefficient

Revival Gold  American Pacific

Very good diversification

The 3 months correlation between Revival and American is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Revival Gold and American Pacific Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Pacific Mining and Revival Gold 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 Revival Gold are associated (or correlated) with American Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Pacific Mining has no effect on the direction of Revival Gold i.e., Revival Gold and American Pacific go up and down completely randomly.

Pair Corralation between Revival Gold and American Pacific

Assuming the 90 days horizon Revival Gold is expected to under-perform the American Pacific. But the otc stock apears to be less risky and, when comparing its historical volatility, Revival Gold is 2.1 times less risky than American Pacific. The otc stock trades about -0.04 of its potential returns per unit of risk. The American Pacific Mining is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  10.00  in American Pacific Mining on August 31, 2024 and sell it today you would earn a total of  7.00  from holding American Pacific Mining or generate 70.0% return on investment over 90 days.

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

Revival Gold  vs.  American Pacific Mining

Revival Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Revival Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

American Pacific Mining

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Pacific Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, American Pacific reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Revival Gold and American Pacific

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

The idea behind Revival Gold and American Pacific Mining 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.