Correlation Between Yamana Gold and Alamos Gold

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

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

Diversification Opportunities for Yamana Gold and Alamos Gold

-0.58

Correlation Coefficient

Yamana Gold  Alamos Gold

Excellent diversification

The 3 months correlation between Yamana and Alamos is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Yamana Gold and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Yamana Gold 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 Yamana Gold are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Yamana Gold i.e., Yamana Gold and Alamos Gold go up and down completely randomly.

Pair Corralation between Yamana Gold and Alamos Gold

If you would invest  1,486  in Alamos Gold on February 3, 2024 and sell it today you would earn a total of  10.00  from holding Alamos Gold or generate 0.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Yamana Gold  vs.  Alamos Gold

Yamana Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yamana Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Yamana Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Alamos Gold

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alamos Gold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Alamos Gold demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yamana Gold and Alamos Gold

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

The idea behind Yamana Gold and Alamos Gold 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..