Correlation Between Gold Reserve and Altamira Gold

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

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

Diversification Opportunities for Gold Reserve and Altamira Gold

0.03

Correlation Coefficient

Gold Reserve  Altamira Gold

Significant diversification

The 3 months correlation between Gold and Altamira is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gold Reserve and Altamira Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamira Gold Corp and Gold Reserve 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 Gold Reserve are associated (or correlated) with Altamira Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamira Gold Corp has no effect on the direction of Gold Reserve i.e., Gold Reserve and Altamira Gold go up and down completely randomly.

Pair Corralation between Gold Reserve and Altamira Gold

Assuming the 90 days horizon Gold Reserve is expected to generate 0.8 times more return on investment than Altamira Gold. However, Gold Reserve is 1.24 times less risky than Altamira Gold. It trades about 0.04 of its potential returns per unit of risk. Altamira Gold Corp is currently generating about -0.08 per unit of risk. If you would invest  155.00  in Gold Reserve on September 29, 2024 and sell it today you would earn a total of  3.00  from holding Gold Reserve or generate 1.94% return on investment over 90 days.

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

Gold Reserve  vs.  Altamira Gold Corp

Gold Reserve

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Reserve are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Reserve reported solid returns over the last few months and may actually be approaching a breakup point.

Altamira Gold Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altamira Gold Corp are ranked lower than 3 (%) 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.

Pair Trading with Gold Reserve and Altamira Gold

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

The idea behind Gold Reserve and Altamira Gold 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..