Correlation Between Altagas Cum and Gatos Silver

Can any of the company-specific risk be diversified away by investing in both Altagas Cum and Gatos 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 Altagas Cum and Gatos Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altagas Cum Red and Gatos Silver, you can compare the effects of market volatilities on Altagas Cum and Gatos 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 Altagas Cum with a short position of Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and Gatos Silver.

Diversification Opportunities for Altagas Cum and Gatos Silver

-0.32

Correlation Coefficient

Altagas Cum  Gatos Silver

Very good diversification

The 3 months correlation between Altagas and Gatos is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Altagas Cum i.e., Altagas Cum and Gatos Silver go up and down completely randomly.

Pair Corralation between Altagas Cum and Gatos Silver

Assuming the 90 days trading horizon Altagas Cum is expected to generate 1.57 times less return on investment than Gatos Silver. But when comparing it to its historical volatility, Altagas Cum Red is 4.5 times less risky than Gatos Silver. It trades about 0.39 of its potential returns per unit of risk. Gatos Silver is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,113  in Gatos Silver on September 12, 2024 and sell it today you would earn a total of  188.00  from holding Gatos Silver or generate 8.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Altagas Cum Red  vs.  Gatos Silver

Altagas Cum Red

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gatos Silver

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gatos Silver are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Gatos Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altagas Cum and Gatos Silver

The main advantage of trading using opposite Altagas Cum and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum position performs unexpectedly, Gatos 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.

The idea behind Altagas Cum Red and Gatos Silver 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.