Correlation Between Altamira Gold and Mako Mining

Can any of the company-specific risk be diversified away by investing in both Altamira Gold and Mako Mining 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 Altamira Gold and Mako Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altamira Gold Corp and Mako Mining Corp, you can compare the effects of market volatilities on Altamira Gold and Mako Mining 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 Altamira Gold with a short position of Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altamira Gold and Mako Mining.

Diversification Opportunities for Altamira Gold and Mako Mining

0.43

Correlation Coefficient

Altamira Gold  Mako Mining

Very weak diversification

The 3 months correlation between Altamira and Mako is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Altamira Gold Corp and Mako Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mako Mining Corp and Altamira Gold 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 Altamira Gold Corp are associated (or correlated) with Mako Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mako Mining Corp has no effect on the direction of Altamira Gold i.e., Altamira Gold and Mako Mining go up and down completely randomly.

Pair Corralation between Altamira Gold and Mako Mining

Assuming the 90 days trading horizon Altamira Gold Corp is expected to generate 3.4 times more return on investment than Mako Mining. However, Altamira Gold is 3.4 times more volatile than Mako Mining Corp. It trades about 0.07 of its potential returns per unit of risk. Mako Mining Corp is currently generating about -0.03 per unit of risk. If you would invest  10.00  in Altamira Gold Corp on September 23, 2024 and sell it today you would earn a total of  2.00  from holding Altamira Gold Corp or generate 20.0% return on investment over 90 days.

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

Altamira Gold Corp  vs.  Mako Mining Corp

Altamira Gold Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altamira Gold Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Altamira Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Mako Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mako Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mako Mining is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Altamira Gold and Mako Mining

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

The idea behind Altamira Gold Corp and Mako Mining 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.