Correlation Between Collective Mining and AltaGas

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

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

Diversification Opportunities for Collective Mining and AltaGas

-0.71

Correlation Coefficient

Collective Mining  AltaGas

Pay attention - limited upside

The 3 months correlation between Collective and AltaGas is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Collective Mining and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Collective 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 Collective Mining are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Collective Mining i.e., Collective Mining and AltaGas go up and down completely randomly.

Pair Corralation between Collective Mining and AltaGas

Considering the 90-day investment horizon Collective Mining is expected to generate 2.76 times more return on investment than AltaGas. However, Collective Mining is 2.76 times more volatile than AltaGas. It trades about 0.13 of its potential returns per unit of risk. AltaGas is currently generating about -0.08 per unit of risk. If you would invest  325.00  in Collective Mining on September 27, 2024 and sell it today you would earn a total of  85.00  from holding Collective Mining or generate 26.15% return on investment over 90 days.

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

Collective Mining  vs.  AltaGas

Collective Mining

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Collective Mining are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Collective Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

AltaGas

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Collective Mining and AltaGas

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

The idea behind Collective Mining and AltaGas 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..