Correlation Between Puma Exploration and Altius Minerals

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

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

Diversification Opportunities for Puma Exploration and Altius Minerals

-0.08

Correlation Coefficient

Puma Exploration  Altius Minerals

Good diversification

The 3 months correlation between Puma and Altius is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Altius Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Minerals and Puma Exploration 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 Puma Exploration are associated (or correlated) with Altius Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Minerals has no effect on the direction of Puma Exploration i.e., Puma Exploration and Altius Minerals go up and down completely randomly.

Pair Corralation between Puma Exploration and Altius Minerals

Assuming the 90 days horizon Puma Exploration is expected to generate 4.22 times more return on investment than Altius Minerals. However, Puma Exploration is 4.22 times more volatile than Altius Minerals. It trades about 0.04 of its potential returns per unit of risk. Altius Minerals is currently generating about -0.05 per unit of risk. If you would invest  5.00  in Puma Exploration on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Puma Exploration or generate 0.0% return on investment over 90 days.

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

Puma Exploration  vs.  Altius Minerals

Puma Exploration

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puma Exploration are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Puma Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Altius Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altius Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Puma Exploration and Altius Minerals

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

The idea behind Puma Exploration and Altius Minerals 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.