Correlation Between Puma Exploration and Minera Alamos

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

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

Diversification Opportunities for Puma Exploration and Minera Alamos

0.26

Correlation Coefficient

Puma Exploration  Minera Alamos

Modest diversification

The 3 months correlation between Puma and Minera is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos 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 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 Puma Exploration i.e., Puma Exploration and Minera Alamos go up and down completely randomly.

Pair Corralation between Puma Exploration and Minera Alamos

Assuming the 90 days horizon Puma Exploration is expected to generate 1.62 times more return on investment than Minera Alamos. However, Puma Exploration is 1.62 times more volatile than Minera Alamos. It trades about 0.01 of its potential returns per unit of risk. Minera Alamos is currently generating about 0.0 per unit of risk. If you would invest  13.00  in Puma Exploration on September 3, 2024 and sell it today you would lose (7.00) from holding Puma Exploration or give up 53.85% of portfolio value over 90 days.

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

Puma Exploration  vs.  Minera Alamos

Puma Exploration

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Puma Exploration are ranked lower than 9 (%) 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.

Minera Alamos

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Minera Alamos are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Minera Alamos reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Puma Exploration and Minera Alamos

The main advantage of trading using opposite Puma Exploration and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration 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 Puma Exploration 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.