Correlation Between Minera Alamos and Klondike Silver

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Can any of the company-specific risk be diversified away by investing in both Minera Alamos and Klondike Silver 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 Klondike Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minera Alamos and Klondike Silver Corp, you can compare the effects of market volatilities on Minera Alamos and Klondike Silver 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 Klondike Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minera Alamos and Klondike Silver.

Diversification Opportunities for Minera Alamos and Klondike Silver

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Minera and Klondike is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Minera Alamos and Klondike Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Silver Corp 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 Klondike Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Silver Corp has no effect on the direction of Minera Alamos i.e., Minera Alamos and Klondike Silver go up and down completely randomly.

Pair Corralation between Minera Alamos and Klondike Silver

Assuming the 90 days horizon Minera Alamos is expected to generate 0.52 times more return on investment than Klondike Silver. However, Minera Alamos is 1.94 times less risky than Klondike Silver. It trades about -0.22 of its potential returns per unit of risk. Klondike Silver Corp is currently generating about -0.16 per unit of risk. If you would invest  39.00  in Minera Alamos on August 29, 2024 and sell it today you would lose (9.00) from holding Minera Alamos or give up 23.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.65%
ValuesDaily Returns

Minera Alamos  vs.  Klondike Silver Corp

 Performance 
       Timeline  
Minera Alamos 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Minera Alamos are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Minera Alamos showed solid returns over the last few months and may actually be approaching a breakup point.
Klondike Silver Corp 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Klondike Silver Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Klondike Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Minera Alamos and Klondike Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Minera Alamos and Klondike Silver

The main advantage of trading using opposite Minera Alamos and Klondike Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minera Alamos position performs unexpectedly, Klondike Silver 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 Klondike Silver will offset losses from the drop in Klondike Silver's long position.
The idea behind Minera Alamos and Klondike Silver Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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