Correlation Between Banyan Gold and Altiplano Metals
Can any of the company-specific risk be diversified away by investing in both Banyan Gold and Altiplano Metals 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 Banyan Gold and Altiplano Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banyan Gold Corp and Altiplano Metals, you can compare the effects of market volatilities on Banyan Gold and Altiplano Metals 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 Banyan Gold with a short position of Altiplano Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banyan Gold and Altiplano Metals.
Diversification Opportunities for Banyan Gold and Altiplano Metals
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banyan and Altiplano is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Banyan Gold Corp and Altiplano Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altiplano Metals and Banyan 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 Banyan Gold Corp are associated (or correlated) with Altiplano Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altiplano Metals has no effect on the direction of Banyan Gold i.e., Banyan Gold and Altiplano Metals go up and down completely randomly.
Pair Corralation between Banyan Gold and Altiplano Metals
Assuming the 90 days horizon Banyan Gold Corp is expected to generate 0.64 times more return on investment than Altiplano Metals. However, Banyan Gold Corp is 1.56 times less risky than Altiplano Metals. It trades about 0.13 of its potential returns per unit of risk. Altiplano Metals is currently generating about 0.03 per unit of risk. If you would invest 22.00 in Banyan Gold Corp on December 1, 2024 and sell it today you would earn a total of 2.00 from holding Banyan Gold Corp or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banyan Gold Corp vs. Altiplano Metals
Performance |
| Timeline |
| Banyan Gold Corp |
| Altiplano Metals |
Banyan Gold and Altiplano Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banyan Gold and Altiplano Metals
The main advantage of trading using opposite Banyan Gold and Altiplano Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banyan Gold position performs unexpectedly, Altiplano Metals 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 Altiplano Metals will offset losses from the drop in Altiplano Metals' long position.| Banyan Gold vs. Galway Metals | Banyan Gold vs. Rockhaven Resources | Banyan Gold vs. Cartier Resources | Banyan Gold vs. Maritime Resources Corp |
| Altiplano Metals vs. Montero Mining and | Altiplano Metals vs. Independence Gold Corp | Altiplano Metals vs. Asiabasemetals | Altiplano Metals vs. Archon Minerals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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