Correlation Between Minera Alamos and Red Pine
Can any of the company-specific risk be diversified away by investing in both Minera Alamos and Red Pine 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 Red Pine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minera Alamos and Red Pine Exploration, you can compare the effects of market volatilities on Minera Alamos and Red Pine 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 Red Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minera Alamos and Red Pine.
Diversification Opportunities for Minera Alamos and Red Pine
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Minera and Red is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Minera Alamos and Red Pine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Pine Exploration 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 Red Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Pine Exploration has no effect on the direction of Minera Alamos i.e., Minera Alamos and Red Pine go up and down completely randomly.
Pair Corralation between Minera Alamos and Red Pine
Assuming the 90 days horizon Minera Alamos is expected to generate 3.22 times less return on investment than Red Pine. But when comparing it to its historical volatility, Minera Alamos is 1.82 times less risky than Red Pine. It trades about 0.01 of its potential returns per unit of risk. Red Pine Exploration is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Red Pine Exploration on August 25, 2024 and sell it today you would lose (6.50) from holding Red Pine Exploration or give up 43.33% 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. Red Pine Exploration
Performance |
| Timeline |
| Minera Alamos |
| Red Pine Exploration |
Minera Alamos and Red Pine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minera Alamos and Red Pine
The main advantage of trading using opposite Minera Alamos and Red Pine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minera Alamos position performs unexpectedly, Red Pine 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 Red Pine will offset losses from the drop in Red Pine's long position.| Minera Alamos vs. Aurion Resources | Minera Alamos vs. Minaurum Gold | Minera Alamos vs. Rio2 Limited | Minera Alamos vs. Roscan Gold Corp |
| Red Pine vs. Endurance Gold | Red Pine vs. Altamira Gold Corp | Red Pine vs. Grande Portage Resources | Red Pine vs. Tectonic Metals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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