Correlation Between Mundoro Capital and Amarc Resources

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

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

Diversification Opportunities for Mundoro Capital and Amarc Resources

-0.26

Correlation Coefficient

Mundoro Capital  Amarc Resources

Very good diversification

The 3 months correlation between Mundoro and Amarc is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mundoro Capital and Amarc Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarc Resources and Mundoro Capital 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 Mundoro Capital are associated (or correlated) with Amarc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarc Resources has no effect on the direction of Mundoro Capital i.e., Mundoro Capital and Amarc Resources go up and down completely randomly.

Pair Corralation between Mundoro Capital and Amarc Resources

Assuming the 90 days horizon Mundoro Capital is expected to under-perform the Amarc Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Mundoro Capital is 2.0 times less risky than Amarc Resources. The otc stock trades about -0.02 of its potential returns per unit of risk. The Amarc Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Amarc Resources on September 5, 2024 and sell it today you would earn a total of  3.00  from holding Amarc Resources or generate 27.27% return on investment over 90 days.

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

Mundoro Capital  vs.  Amarc Resources

Mundoro Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amarc Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Amarc Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mundoro Capital and Amarc Resources

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

The idea behind Mundoro Capital and Amarc 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.