Correlation Between Minera Alamos and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Minera Alamos and Algoma Steel 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 Minera Alamos and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minera Alamos and Algoma Steel Group, you can compare the effects of market volatilities on Minera Alamos and Algoma Steel 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 Minera Alamos with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minera Alamos and Algoma Steel.
Diversification Opportunities for Minera Alamos and Algoma Steel
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Minera and Algoma is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Minera Alamos and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Minera Alamos 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 Minera Alamos are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Minera Alamos i.e., Minera Alamos and Algoma Steel go up and down completely randomly.
Pair Corralation between Minera Alamos and Algoma Steel
Assuming the 90 days horizon Minera Alamos is expected to generate 2.82 times less return on investment than Algoma Steel. In addition to that, Minera Alamos is 1.68 times more volatile than Algoma Steel Group. It trades about 0.01 of its total potential returns per unit of risk. Algoma Steel Group is currently generating about 0.05 per unit of volatility. If you would invest 743.00 in Algoma Steel Group on September 4, 2024 and sell it today you would earn a total of 313.00 from holding Algoma Steel Group or generate 42.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minera Alamos vs. Algoma Steel Group
Performance |
| Timeline |
| Minera Alamos |
| Algoma Steel Group |
Minera Alamos and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minera Alamos and Algoma Steel
The main advantage of trading using opposite Minera Alamos and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minera Alamos position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Minera Alamos vs. First Majestic Silver | Minera Alamos vs. Ivanhoe Energy | Minera Alamos vs. Orezone Gold Corp | Minera Alamos vs. Faraday Copper Corp |
| Algoma Steel vs. Friedman Industries | Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Reliance Steel Aluminum | Algoma Steel vs. Universal Stainless Alloy |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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