Correlation Between Cerrado Gold and Minera Alamos
Can any of the company-specific risk be diversified away by investing in both Cerrado Gold 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 Cerrado Gold and Minera Alamos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerrado Gold and Minera Alamos, you can compare the effects of market volatilities on Cerrado Gold 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 Cerrado Gold with a short position of Minera Alamos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerrado Gold and Minera Alamos.
Diversification Opportunities for Cerrado Gold and Minera Alamos
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cerrado and Minera is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cerrado Gold and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos and Cerrado 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 Cerrado 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 Cerrado Gold i.e., Cerrado Gold and Minera Alamos go up and down completely randomly.
Pair Corralation between Cerrado Gold and Minera Alamos
Assuming the 90 days horizon Cerrado Gold is expected to under-perform the Minera Alamos. But the otc stock apears to be less risky and, when comparing its historical volatility, Cerrado Gold is 1.26 times less risky than Minera Alamos. The otc stock trades about -0.11 of its potential returns per unit of risk. The Minera Alamos is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Minera Alamos on November 4, 2024 and sell it today you would earn a total of 3.00 from holding Minera Alamos or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cerrado Gold vs. Minera Alamos
Performance |
| Timeline |
| Cerrado Gold |
| Minera Alamos |
Cerrado Gold and Minera Alamos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cerrado Gold and Minera Alamos
The main advantage of trading using opposite Cerrado Gold and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerrado Gold 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.| Cerrado Gold vs. Antioquia Gold | Cerrado Gold vs. Red Pine Exploration | Cerrado Gold vs. Bellevue Gold Limited | Cerrado Gold vs. Asante 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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