Correlation Between First American and Altura Mining
Can any of the company-specific risk be diversified away by investing in both First American and Altura Mining 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 First American and Altura Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Silver and Altura Mining Limited, you can compare the effects of market volatilities on First American and Altura Mining 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 First American with a short position of Altura Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Altura Mining.
Diversification Opportunities for First American and Altura Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Altura is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Altura Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Mining Limited and First American 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 First American Silver are associated (or correlated) with Altura Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Mining Limited has no effect on the direction of First American i.e., First American and Altura Mining go up and down completely randomly.
Pair Corralation between First American and Altura Mining
Given the investment horizon of 90 days First American is expected to generate 4.66 times less return on investment than Altura Mining. But when comparing it to its historical volatility, First American Silver is 1.64 times less risky than Altura Mining. It trades about 0.04 of its potential returns per unit of risk. Altura Mining Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.90 in Altura Mining Limited on November 21, 2024 and sell it today you would earn a total of 0.10 from holding Altura Mining Limited or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
First American Silver vs. Altura Mining Limited
Performance |
| Timeline |
| First American Silver |
| Altura Mining Limited |
First American and Altura Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Altura Mining
The main advantage of trading using opposite First American and Altura Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Altura Mining 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 Altura Mining will offset losses from the drop in Altura Mining's long position.| First American vs. Australian Vanadium Limited | First American vs. International Lithium Corp | First American vs. Wealth Minerals | First American vs. Decade Resources |
| Altura Mining vs. Aurelia Metals Limited | Altura Mining vs. Ascendant Resources | Altura Mining vs. Artemis Resources | Altura Mining vs. Azimut Exploration |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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