Correlation Between Altura Mining and Portofino Resources

Can any of the company-specific risk be diversified away by investing in both Altura Mining and Portofino Resources 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 Portofino Resources 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 Portofino Resources, you can compare the effects of market volatilities on Altura Mining and Portofino Resources 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 Portofino Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altura Mining and Portofino Resources.

Diversification Opportunities for Altura Mining and Portofino Resources

0.08

Correlation Coefficient

Altura Mining  Portofino Resources

Significant diversification

The 3 months correlation between Altura and Portofino is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Altura Mining Limited and Portofino Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portofino Resources 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 Portofino Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portofino Resources has no effect on the direction of Altura Mining i.e., Altura Mining and Portofino Resources go up and down completely randomly.

Pair Corralation between Altura Mining and Portofino Resources

Assuming the 90 days horizon Altura Mining Limited is expected to generate 10.46 times more return on investment than Portofino Resources. However, Altura Mining is 10.46 times more volatile than Portofino Resources. It trades about 0.13 of its potential returns per unit of risk. Portofino Resources is currently generating about 0.01 per unit of risk. If you would invest  2.00  in Altura Mining Limited on September 26, 2024 and sell it today you would lose (1.44) from holding Altura Mining Limited or give up 72.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Altura Mining Limited  vs.  Portofino Resources

Altura Mining Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Mining Limited are ranked lower than 10 (%) 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.

Portofino Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Portofino Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unfluctuating basic indicators, Portofino Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Altura Mining and Portofino Resources

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

The idea behind Altura Mining Limited and Portofino Resources 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.