Correlation Between Spearmint Resources and First American

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

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

Diversification Opportunities for Spearmint Resources and First American

0.01

Correlation Coefficient

Spearmint Resources  First American

Significant diversification

The 3 months correlation between Spearmint and First is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Spearmint Resources and First American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Silver and Spearmint 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 Spearmint Resources are associated (or correlated) with First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Silver has no effect on the direction of Spearmint Resources i.e., Spearmint Resources and First American go up and down completely randomly.

Pair Corralation between Spearmint Resources and First American

Assuming the 90 days horizon Spearmint Resources is expected to generate 2.51 times more return on investment than First American. However, Spearmint Resources is 2.51 times more volatile than First American Silver. It trades about 0.32 of its potential returns per unit of risk. First American Silver is currently generating about 0.11 per unit of risk. If you would invest  1.03  in Spearmint Resources on May 26, 2025 and sell it today you would earn a total of  4.87  from holding Spearmint Resources or generate 472.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	39.06%
Values	Daily Returns

Spearmint Resources  vs.  First American Silver

Spearmint Resources

Risk-Adjusted Performance

Solid

Over the last 90 days Spearmint Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Spearmint Resources reported solid returns over the last few months and may actually be approaching a breakup point.

First American Silver

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First American Silver are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, First American sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spearmint Resources and First American

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

The idea behind Spearmint Resources and First American Silver 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.