Correlation Between American Creek and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both American Creek and Gemfields Group 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 American Creek and Gemfields Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Creek Resources and Gemfields Group Limited, you can compare the effects of market volatilities on American Creek and Gemfields Group 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 American Creek with a short position of Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Creek and Gemfields Group.
Diversification Opportunities for American Creek and Gemfields Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Gemfields is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding American Creek Resources and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group and American Creek 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 American Creek Resources are associated (or correlated) with Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of American Creek i.e., American Creek and Gemfields Group go up and down completely randomly.
Pair Corralation between American Creek and Gemfields Group
If you would invest 10.00 in Gemfields Group Limited on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Gemfields Group Limited or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
American Creek Resources vs. Gemfields Group Limited
Performance |
Timeline |
American Creek Resources |
Gemfields Group |
American Creek and Gemfields Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Creek and Gemfields Group
The main advantage of trading using opposite American Creek and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Creek position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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