Correlation Between Triple Flag and American Sierra
Can any of the company-specific risk be diversified away by investing in both Triple Flag and American Sierra 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 Triple Flag and American Sierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and American Sierra Gold, you can compare the effects of market volatilities on Triple Flag and American Sierra 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 Triple Flag with a short position of American Sierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and American Sierra.
Diversification Opportunities for Triple Flag and American Sierra
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Triple and American is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and American Sierra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Sierra Gold and Triple Flag 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 Triple Flag Precious are associated (or correlated) with American Sierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Sierra Gold has no effect on the direction of Triple Flag i.e., Triple Flag and American Sierra go up and down completely randomly.
Pair Corralation between Triple Flag and American Sierra
Given the investment horizon of 90 days Triple Flag Precious is expected to under-perform the American Sierra. But the stock apears to be less risky and, when comparing its historical volatility, Triple Flag Precious is 5.49 times less risky than American Sierra. The stock trades about -0.22 of its potential returns per unit of risk. The American Sierra Gold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.50 in American Sierra Gold on September 26, 2024 and sell it today you would earn a total of 0.00 from holding American Sierra Gold or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Triple Flag Precious vs. American Sierra Gold
Performance |
Timeline |
Triple Flag Precious |
American Sierra Gold |
Triple Flag and American Sierra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Triple Flag and American Sierra
The main advantage of trading using opposite Triple Flag and American Sierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag position performs unexpectedly, American Sierra 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 Sierra will offset losses from the drop in American Sierra's long position.Triple Flag vs. Gold Royalty Corp | Triple Flag vs. SilverCrest Metals | Triple Flag vs. McEwen Mining | Triple Flag vs. Hecla Mining |
American Sierra vs. Compania de Minas | American Sierra vs. Triple Flag Precious | American Sierra vs. Zimplats Holdings Limited |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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