Correlation Between Altura Mining and Grid Metals

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

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

Diversification Opportunities for Altura Mining and Grid Metals

0.17

Correlation Coefficient

Altura Mining  Grid Metals

Average diversification

The 3 months correlation between Altura and Grid is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Altura Mining Limited and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals Corp and Altura Mining 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 Altura Mining Limited are associated (or correlated) with Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of Altura Mining i.e., Altura Mining and Grid Metals go up and down completely randomly.

Pair Corralation between Altura Mining and Grid Metals

Assuming the 90 days horizon Altura Mining Limited is expected to generate 16.43 times more return on investment than Grid Metals. However, Altura Mining is 16.43 times more volatile than Grid Metals Corp. It trades about 0.1 of its potential returns per unit of risk. Grid Metals Corp is currently generating about 0.0 per unit of risk. If you would invest  2.20  in Altura Mining Limited on September 5, 2024 and sell it today you would lose (1.67) from holding Altura Mining Limited or give up 75.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Altura Mining Limited  vs.  Grid Metals Corp

Altura Mining Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Mining Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altura Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Grid Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grid Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Grid Metals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Altura Mining and Grid Metals

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

The idea behind Altura Mining Limited and Grid Metals 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.