Correlation Between American Security and Altius Renewable

Can any of the company-specific risk be diversified away by investing in both American Security and Altius Renewable 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 American Security and Altius Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Security Resources and Altius Renewable Royalties, you can compare the effects of market volatilities on American Security and Altius Renewable 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 American Security with a short position of Altius Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Security and Altius Renewable.

Diversification Opportunities for American Security and Altius Renewable

0.0

Correlation Coefficient

American Security  Altius Renewable

Pay attention - limited upside

The 3 months correlation between American and Altius is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Security Resources and Altius Renewable Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Renewable Roy and American Security 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 American Security Resources are associated (or correlated) with Altius Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Renewable Roy has no effect on the direction of American Security i.e., American Security and Altius Renewable go up and down completely randomly.

Pair Corralation between American Security and Altius Renewable

If you would invest  718.00  in Altius Renewable Royalties on September 3, 2024 and sell it today you would earn a total of  127.00  from holding Altius Renewable Royalties or generate 17.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

American Security Resources  vs.  Altius Renewable Royalties

American Security

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Security Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, American Security is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Altius Renewable Roy

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Altius Renewable Royalties are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Altius Renewable reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Security and Altius Renewable

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

The idea behind American Security Resources and Altius Renewable Royalties 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.