Correlation Between Altamira Gold and Aurion Resources

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

Diversification Opportunities for Altamira Gold and Aurion Resources

0.23

Correlation Coefficient

Altamira Gold  Aurion Resources

Modest diversification

The 3 months correlation between Altamira and Aurion is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Altamira Gold Corp and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources 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 Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Altamira Gold i.e., Altamira Gold and Aurion Resources go up and down completely randomly.

Pair Corralation between Altamira Gold and Aurion Resources

Assuming the 90 days horizon Altamira Gold Corp is expected to under-perform the Aurion Resources. In addition to that, Altamira Gold is 1.33 times more volatile than Aurion Resources. It trades about -0.11 of its total potential returns per unit of risk. Aurion Resources is currently generating about 0.02 per unit of volatility. If you would invest  47.00  in Aurion Resources on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Aurion Resources or generate 0.0% return on investment over 90 days.

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

Altamira Gold Corp  vs.  Aurion Resources

Altamira Gold Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altamira Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altamira Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Aurion Resources

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Altamira Gold and Aurion Resources

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

The idea behind Altamira Gold Corp and Aurion 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.