Correlation Between Almaden Minerals and Altius Minerals

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

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

Diversification Opportunities for Almaden Minerals and Altius Minerals

-0.29

Correlation Coefficient

Almaden Minerals  Altius Minerals

Very good diversification

The 3 months correlation between Almaden and Altius is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Altius Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Minerals and Almaden Minerals 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 Almaden Minerals are associated (or correlated) with Altius Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Minerals has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Altius Minerals go up and down completely randomly.

Pair Corralation between Almaden Minerals and Altius Minerals

Assuming the 90 days trading horizon Almaden Minerals is expected to generate 11.27 times less return on investment than Altius Minerals. In addition to that, Almaden Minerals is 1.87 times more volatile than Altius Minerals. It trades about 0.01 of its total potential returns per unit of risk. Altius Minerals is currently generating about 0.26 per unit of volatility. If you would invest  2,020  in Altius Minerals on February 7, 2024 and sell it today you would earn a total of  160.00  from holding Altius Minerals or generate 7.92% return on investment over 90 days.

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

Almaden Minerals  vs.  Altius Minerals

Almaden Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Almaden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Almaden Minerals is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Altius Minerals

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altius Minerals are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Altius Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Almaden Minerals and Altius Minerals

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

The idea behind Almaden Minerals and Altius Minerals 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.