Correlation Between Altamira Gold and Finlay Minerals

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

Diversification Opportunities for Altamira Gold and Finlay Minerals

-0.59

Correlation Coefficient

Altamira Gold  Finlay Minerals

Excellent diversification

The 3 months correlation between Altamira and Finlay is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Altamira Gold Corp and Finlay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finlay Minerals 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 Finlay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finlay Minerals has no effect on the direction of Altamira Gold i.e., Altamira Gold and Finlay Minerals go up and down completely randomly.

Pair Corralation between Altamira Gold and Finlay Minerals

Assuming the 90 days trading horizon Altamira Gold Corp is expected to under-perform the Finlay Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Altamira Gold Corp is 1.49 times less risky than Finlay Minerals. The stock trades about 0.0 of its potential returns per unit of risk. The Finlay Minerals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Finlay Minerals on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Finlay Minerals or generate 0.0% return on investment over 90 days.

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

Altamira Gold Corp  vs.  Finlay Minerals

Altamira Gold Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altamira Gold Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Altamira Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Finlay Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finlay Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Finlay Minerals 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 Altamira Gold and Finlay Minerals

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

The idea behind Altamira Gold Corp and Finlay 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.