Correlation Between Altamira Gold and Interfor

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

Diversification Opportunities for Altamira Gold and Interfor

0.06

Correlation Coefficient

Altamira Gold  Interfor

Significant diversification

The 3 months correlation between Altamira and Interfor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Altamira Gold Corp and Interfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interfor 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 Interfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interfor has no effect on the direction of Altamira Gold i.e., Altamira Gold and Interfor go up and down completely randomly.

Pair Corralation between Altamira Gold and Interfor

Assuming the 90 days horizon Altamira Gold Corp is expected to generate 2.91 times more return on investment than Interfor. However, Altamira Gold is 2.91 times more volatile than Interfor. It trades about -0.02 of its potential returns per unit of risk. Interfor is currently generating about -0.47 per unit of risk. If you would invest  8.95  in Altamira Gold Corp on September 27, 2024 and sell it today you would lose (0.55) from holding Altamira Gold Corp or give up 6.15% of portfolio value over 90 days.

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

Altamira Gold Corp  vs.  Interfor

Altamira Gold Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altamira Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altamira Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Interfor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interfor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Altamira Gold and Interfor

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

The idea behind Altamira Gold Corp and Interfor 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.