Correlation Between AM Resources and Gitennes Exploration

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

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

Diversification Opportunities for AM Resources and Gitennes Exploration

-0.53

Correlation Coefficient

AM Resources  Gitennes Exploration

Excellent diversification

The 3 months correlation between AMR and Gitennes is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AM Resources Corp and Gitennes Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitennes Exploration and AM 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 AM Resources Corp are associated (or correlated) with Gitennes Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gitennes Exploration has no effect on the direction of AM Resources i.e., AM Resources and Gitennes Exploration go up and down completely randomly.

Pair Corralation between AM Resources and Gitennes Exploration

Assuming the 90 days horizon AM Resources Corp is expected to generate 0.53 times more return on investment than Gitennes Exploration. However, AM Resources Corp is 1.9 times less risky than Gitennes Exploration. It trades about -0.26 of its potential returns per unit of risk. Gitennes Exploration is currently generating about -0.21 per unit of risk. If you would invest  5.00  in AM Resources Corp on February 11, 2024 and sell it today you would lose (1.50) from holding AM Resources Corp or give up 30.0% of portfolio value over 90 days.

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

AM Resources Corp  vs.  Gitennes Exploration

AM Resources Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AM Resources Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, AM Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Gitennes Exploration

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gitennes Exploration are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gitennes Exploration showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AM Resources and Gitennes Exploration

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

The idea behind AM Resources Corp and Gitennes Exploration 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.