Correlation Between Contango ORE and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Contango ORE and Alamos Gold 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 Contango ORE and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contango ORE and Alamos Gold, you can compare the effects of market volatilities on Contango ORE and Alamos Gold 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 Contango ORE with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contango ORE and Alamos Gold.
Diversification Opportunities for Contango ORE and Alamos Gold
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Contango and Alamos is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Contango ORE 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 Contango ORE are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Contango ORE i.e., Contango ORE and Alamos Gold go up and down completely randomly.
Pair Corralation between Contango ORE and Alamos Gold
Given the investment horizon of 90 days Contango ORE is expected to generate 6.42 times less return on investment than Alamos Gold. In addition to that, Contango ORE is 1.77 times more volatile than Alamos Gold. It trades about 0.04 of its total potential returns per unit of risk. Alamos Gold is currently generating about 0.44 per unit of volatility. If you would invest 1,933 in Alamos Gold on November 9, 2024 and sell it today you would earn a total of 292.00 from holding Alamos Gold or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contango ORE vs. Alamos Gold
Performance |
| Timeline |
| Contango ORE |
| Alamos Gold |
Contango ORE and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contango ORE and Alamos Gold
The main advantage of trading using opposite Contango ORE and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE position performs unexpectedly, Alamos Gold 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Contango ORE vs. First Guaranty Bancshares | Contango ORE vs. Glen Burnie Bancorp | Contango ORE vs. Princeton Capital |
| Alamos Gold vs. Pan American Silver | Alamos Gold vs. Newmont Goldcorp Corp | Alamos Gold vs. Wheaton Precious Metals | Alamos Gold vs. Franco Nevada |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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