Correlation Between American International and Labrador Gold

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

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

Diversification Opportunities for American International and Labrador Gold

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Correlation Coefficient

American International  Labrador Gold

Pay attention - limited upside

The 3 months correlation between American and Labrador is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American International Venture and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold Corp and American International 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 International Ventures are associated (or correlated) with Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of American International i.e., American International and Labrador Gold go up and down completely randomly.

Pair Corralation between American International and Labrador Gold

Given the investment horizon of 90 days American International Ventures is expected to generate 6.77 times more return on investment than Labrador Gold. However, American International is 6.77 times more volatile than Labrador Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Labrador Gold Corp is currently generating about -0.02 per unit of risk. If you would invest  0.02  in American International Ventures on September 16, 2024 and sell it today you would earn a total of  0.17  from holding American International Ventures or generate 850.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

American International Venture  vs.  Labrador Gold Corp

American International

Risk-Adjusted Performance

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Very Weak

Over the last 90 days American International Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, American International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Labrador Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Labrador Gold Corp 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with American International and Labrador Gold

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

The idea behind American International Ventures and Labrador Gold Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.