Correlation Between Amerigo Resources and Trigon Metals
Can any of the company-specific risk be diversified away by investing in both Amerigo Resources and Trigon Metals 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 Amerigo Resources and Trigon Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amerigo Resources and Trigon Metals, you can compare the effects of market volatilities on Amerigo Resources and Trigon Metals 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 Amerigo Resources with a short position of Trigon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amerigo Resources and Trigon Metals.
Diversification Opportunities for Amerigo Resources and Trigon Metals
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amerigo and Trigon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Amerigo Resources and Trigon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigon Metals and Amerigo Resources 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 Amerigo Resources are associated (or correlated) with Trigon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trigon Metals has no effect on the direction of Amerigo Resources i.e., Amerigo Resources and Trigon Metals go up and down completely randomly.
Pair Corralation between Amerigo Resources and Trigon Metals
Assuming the 90 days horizon Amerigo Resources is expected to generate 0.43 times more return on investment than Trigon Metals. However, Amerigo Resources is 2.31 times less risky than Trigon Metals. It trades about 0.17 of its potential returns per unit of risk. Trigon Metals is currently generating about 0.05 per unit of risk. If you would invest 99.00 in Amerigo Resources on March 3, 2024 and sell it today you would earn a total of 28.00 from holding Amerigo Resources or generate 28.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amerigo Resources vs. Trigon Metals
Performance |
Timeline |
Amerigo Resources |
Trigon Metals |
Amerigo Resources and Trigon Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amerigo Resources and Trigon Metals
The main advantage of trading using opposite Amerigo Resources and Trigon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amerigo Resources position performs unexpectedly, Trigon Metals 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 Trigon Metals will offset losses from the drop in Trigon Metals' long position.Amerigo Resources vs. Huntsman Exploration | Amerigo Resources vs. Aurelia Metals Limited | Amerigo Resources vs. Adriatic Metals PLC | Amerigo Resources vs. American Helium |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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