Correlation Between Altiplano Metals and Champion Bear

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

By analyzing existing cross correlation between Altiplano Metals and Champion Bear Resources, you can compare the effects of market volatilities on Altiplano Metals and Champion Bear 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 Altiplano Metals with a short position of Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altiplano Metals and Champion Bear.

Diversification Opportunities for Altiplano Metals and Champion Bear

-0.61

Correlation Coefficient

Altiplano Metals  Champion Bear

Excellent diversification

The 3 months correlation between Altiplano and Champion is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Altiplano Metals and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources and Altiplano Metals 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 Altiplano Metals are associated (or correlated) with Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Altiplano Metals i.e., Altiplano Metals and Champion Bear go up and down completely randomly.

Pair Corralation between Altiplano Metals and Champion Bear

Assuming the 90 days horizon Altiplano Metals is expected to under-perform the Champion Bear. But the pink sheet apears to be less risky and, when comparing its historical volatility, Altiplano Metals is 2.12 times less risky than Champion Bear. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Champion Bear Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Champion Bear Resources on September 3, 2024 and sell it today you would lose (3.00) from holding Champion Bear Resources or give up 42.86% of portfolio value over 90 days.

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

Altiplano Metals  vs.  Champion Bear Resources

Altiplano Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altiplano Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Champion Bear Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Champion Bear Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Champion Bear reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altiplano Metals and Champion Bear

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

The idea behind Altiplano Metals and Champion Bear Resources 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.