Correlation Between Minera Alamos and Big Ridge
Can any of the company-specific risk be diversified away by investing in both Minera Alamos and Big Ridge 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 Big Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minera Alamos and Big Ridge Gold, you can compare the effects of market volatilities on Minera Alamos and Big Ridge 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 Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minera Alamos and Big Ridge.
Diversification Opportunities for Minera Alamos and Big Ridge
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Minera and Big is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Minera Alamos and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold 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 Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of Minera Alamos i.e., Minera Alamos and Big Ridge go up and down completely randomly.
Pair Corralation between Minera Alamos and Big Ridge
Assuming the 90 days horizon Minera Alamos is expected to under-perform the Big Ridge. But the otc stock apears to be less risky and, when comparing its historical volatility, Minera Alamos is 1.44 times less risky than Big Ridge. The otc stock trades about -0.18 of its potential returns per unit of risk. The Big Ridge Gold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Big Ridge Gold on September 1, 2024 and sell it today you would lose (0.78) from holding Big Ridge Gold or give up 9.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minera Alamos vs. Big Ridge Gold
Performance |
| Timeline |
| Minera Alamos |
| Big Ridge Gold |
Minera Alamos and Big Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minera Alamos and Big Ridge
The main advantage of trading using opposite Minera Alamos and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minera Alamos position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.| Minera Alamos vs. Aurion Resources | Minera Alamos vs. Minaurum Gold | Minera Alamos vs. Rio2 Limited | Minera Alamos vs. Roscan Gold Corp |
| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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