Correlation Between Baroyeca Gold and Minera Alamos

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

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

Diversification Opportunities for Baroyeca Gold and Minera Alamos

0.58

Correlation Coefficient

Baroyeca Gold  Minera Alamos

Very weak diversification

The 3 months correlation between Baroyeca and Minera is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Baroyeca Gold Silver and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos and Baroyeca 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 Baroyeca Gold Silver 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 Baroyeca Gold i.e., Baroyeca Gold and Minera Alamos go up and down completely randomly.

Pair Corralation between Baroyeca Gold and Minera Alamos

Assuming the 90 days horizon Baroyeca Gold Silver is expected to generate 3.89 times more return on investment than Minera Alamos. However, Baroyeca Gold is 3.89 times more volatile than Minera Alamos. It trades about 0.05 of its potential returns per unit of risk. Minera Alamos is currently generating about -0.01 per unit of risk. If you would invest  6.00  in Baroyeca Gold Silver on October 7, 2024 and sell it today you would lose (4.00) from holding Baroyeca Gold Silver or give up 66.67% of portfolio value over 90 days.

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

Baroyeca Gold Silver  vs.  Minera Alamos

Baroyeca Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baroyeca Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Minera Alamos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minera Alamos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Baroyeca Gold and Minera Alamos

The main advantage of trading using opposite Baroyeca Gold and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baroyeca Gold 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 Baroyeca Gold Silver 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.