Correlation Between Big Ridge and Minera Alamos
Can any of the company-specific risk be diversified away by investing in both Big Ridge and Minera Alamos 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 Big Ridge and Minera Alamos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Ridge Gold and Minera Alamos, you can compare the effects of market volatilities on Big Ridge and Minera Alamos 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 Big Ridge with a short position of Minera Alamos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Ridge and Minera Alamos.
Diversification Opportunities for Big Ridge and Minera Alamos
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Big and Minera is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Big Ridge Gold and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos and Big Ridge 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 Big Ridge Gold are associated (or correlated) with Minera Alamos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minera Alamos has no effect on the direction of Big Ridge i.e., Big Ridge and Minera Alamos go up and down completely randomly.
Pair Corralation between Big Ridge and Minera Alamos
Assuming the 90 days horizon Big Ridge Gold is expected to generate 1.44 times more return on investment than Minera Alamos. However, Big Ridge is 1.44 times more volatile than Minera Alamos. It trades about -0.04 of its potential returns per unit of risk. Minera Alamos is currently generating about -0.18 per unit of risk. If you would invest 8.00 in Big Ridge Gold on September 1, 2024 and sell it today you would lose (0.78) from holding Big Ridge Gold or give up 9.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Ridge Gold vs. Minera Alamos
Performance |
| Timeline |
| Big Ridge Gold |
| Minera Alamos |
Big Ridge and Minera Alamos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Ridge and Minera Alamos
The main advantage of trading using opposite Big Ridge and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Ridge position performs unexpectedly, Minera Alamos 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 Minera Alamos will offset losses from the drop in Minera Alamos' long position.| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
| Minera Alamos vs. Aurion Resources | Minera Alamos vs. Minaurum Gold | Minera Alamos vs. Rio2 Limited | Minera Alamos vs. Roscan Gold Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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