Correlation Between Altiplano Metals and Colonial Coal
Can any of the company-specific risk be diversified away by investing in both Altiplano Metals and Colonial Coal 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 Altiplano Metals and Colonial Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altiplano Metals and Colonial Coal International, you can compare the effects of market volatilities on Altiplano Metals and Colonial Coal 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 Altiplano Metals with a short position of Colonial Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altiplano Metals and Colonial Coal.
Diversification Opportunities for Altiplano Metals and Colonial Coal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Altiplano and Colonial is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Altiplano Metals and Colonial Coal International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colonial Coal Intern and Altiplano Metals 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 Altiplano Metals are associated (or correlated) with Colonial Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colonial Coal Intern has no effect on the direction of Altiplano Metals i.e., Altiplano Metals and Colonial Coal go up and down completely randomly.
Pair Corralation between Altiplano Metals and Colonial Coal
Assuming the 90 days horizon Altiplano Metals is expected to under-perform the Colonial Coal. In addition to that, Altiplano Metals is 1.67 times more volatile than Colonial Coal International. It trades about 0.0 of its total potential returns per unit of risk. Colonial Coal International is currently generating about 0.04 per unit of volatility. If you would invest 151.00 in Colonial Coal International on September 3, 2024 and sell it today you would earn a total of 64.00 from holding Colonial Coal International or generate 42.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altiplano Metals vs. Colonial Coal International
Performance |
| Timeline |
| Altiplano Metals |
| Colonial Coal Intern |
Altiplano Metals and Colonial Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altiplano Metals and Colonial Coal
The main advantage of trading using opposite Altiplano Metals and Colonial Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altiplano Metals position performs unexpectedly, Colonial Coal 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 Colonial Coal will offset losses from the drop in Colonial Coal's long position.| Altiplano Metals vs. Algoma Steel Group | Altiplano Metals vs. Champion Iron | Altiplano Metals vs. International Zeolite Corp | Altiplano Metals vs. European Residential Real |
| Colonial Coal vs. Batero Gold Corp | Colonial Coal vs. Bravada Gold | Colonial Coal vs. Black Widow Resources | Colonial Coal vs. Angkor Resources 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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