Correlation Between Altius Minerals and South Star

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

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

Diversification Opportunities for Altius Minerals and South Star

-0.24

Correlation Coefficient

Altius Minerals  South Star

Very good diversification

The 3 months correlation between Altius and South is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Altius Minerals and South Star Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Star Battery and Altius 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 Altius Minerals are associated (or correlated) with South Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Star Battery has no effect on the direction of Altius Minerals i.e., Altius Minerals and South Star go up and down completely randomly.

Pair Corralation between Altius Minerals and South Star

Assuming the 90 days horizon Altius Minerals is expected to generate 6.13 times less return on investment than South Star. But when comparing it to its historical volatility, Altius Minerals is 3.39 times less risky than South Star. It trades about 0.02 of its potential returns per unit of risk. South Star Battery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  36.00  in South Star Battery on December 2, 2024 and sell it today you would lose (2.00) from holding South Star Battery or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.83%
Values	Daily Returns

Altius Minerals  vs.  South Star Battery

Altius Minerals

Risk-Adjusted Performance

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.

South Star Battery

Risk-Adjusted Performance

Very Weak

Over the last 90 days South Star Battery has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, South Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Altius Minerals and South Star

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

The idea behind Altius Minerals and South Star Battery 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .