Correlation Between Metallic Minerals and Minera Alamos

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

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

Diversification Opportunities for Metallic Minerals and Minera Alamos

0.63

Correlation Coefficient

Metallic Minerals  Minera Alamos

Poor diversification

The 3 months correlation between Metallic and Minera is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Metallic Minerals Corp and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos and Metallic Minerals 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 Metallic Minerals Corp are associated (or correlated) with Minera Alamos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minera Alamos has no effect on the direction of Metallic Minerals i.e., Metallic Minerals and Minera Alamos go up and down completely randomly.

Pair Corralation between Metallic Minerals and Minera Alamos

Assuming the 90 days horizon Metallic Minerals Corp is expected to under-perform the Minera Alamos. In addition to that, Metallic Minerals is 1.38 times more volatile than Minera Alamos. It trades about -0.04 of its total potential returns per unit of risk. Minera Alamos is currently generating about 0.01 per unit of volatility. If you would invest  32.00  in Minera Alamos on September 13, 2024 and sell it today you would lose (4.00) from holding Minera Alamos or give up 12.5% of portfolio value over 90 days.

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

Metallic Minerals Corp  vs.  Minera Alamos

Metallic Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metallic Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Minera Alamos

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Minera Alamos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Minera Alamos is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Metallic Minerals and Minera Alamos

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

The idea behind Metallic Minerals Corp and Minera Alamos 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.