Correlation Between GoldMining and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Alamos Gold, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Alamos Gold.
Diversification Opportunities for GoldMining and Alamos Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GoldMining and Alamos is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Alamos Gold go up and down completely randomly.
Pair Corralation between GoldMining and Alamos Gold
Given the investment horizon of 90 days GoldMining is expected to generate 1.21 times more return on investment than Alamos Gold. However, GoldMining is 1.21 times more volatile than Alamos Gold. It trades about -0.17 of its potential returns per unit of risk. Alamos Gold is currently generating about -0.25 per unit of risk. If you would invest 94.00 in GoldMining on August 30, 2024 and sell it today you would lose (10.00) from holding GoldMining or give up 10.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoldMining vs. Alamos Gold
Performance |
| Timeline |
| GoldMining |
| Alamos Gold |
GoldMining and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Alamos Gold
The main advantage of trading using opposite GoldMining and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Paramount Gold Nevada | GoldMining vs. Liberty Gold Corp | GoldMining vs. International Tower Hill | GoldMining vs. Allegiant Gold |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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