Correlation Between AbraSilver Resource and Millrock Resources

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

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

Diversification Opportunities for AbraSilver Resource and Millrock Resources

0.66

Correlation Coefficient

AbraSilver Resource  Millrock Resources

Poor diversification

The 3 months correlation between AbraSilver and Millrock is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp and Millrock Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millrock Resources and AbraSilver Resource 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 AbraSilver Resource Corp are associated (or correlated) with Millrock Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millrock Resources has no effect on the direction of AbraSilver Resource i.e., AbraSilver Resource and Millrock Resources go up and down completely randomly.

Pair Corralation between AbraSilver Resource and Millrock Resources

If you would invest  163.00  in AbraSilver Resource Corp on September 2, 2024 and sell it today you would earn a total of  33.00  from holding AbraSilver Resource Corp or generate 20.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

AbraSilver Resource Corp  vs.  Millrock Resources

AbraSilver Resource Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AbraSilver Resource Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AbraSilver Resource reported solid returns over the last few months and may actually be approaching a breakup point.

Millrock Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millrock Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Millrock Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AbraSilver Resource and Millrock Resources

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

The idea behind AbraSilver Resource Corp and Millrock 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..