Correlation Between Altamira Gold and Cabral Gold

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

Diversification Opportunities for Altamira Gold and Cabral Gold

-0.28

Correlation Coefficient

Altamira Gold  Cabral Gold

Very good diversification

The 3 months correlation between Altamira and Cabral is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Altamira Gold Corp and Cabral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabral Gold 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 Cabral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabral Gold has no effect on the direction of Altamira Gold i.e., Altamira Gold and Cabral Gold go up and down completely randomly.

Pair Corralation between Altamira Gold and Cabral Gold

Assuming the 90 days horizon Altamira Gold Corp is expected to under-perform the Cabral Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Altamira Gold Corp is 1.44 times less risky than Cabral Gold. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Cabral Gold is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Cabral Gold on December 30, 2024 and sell it today you would earn a total of  11.00  from holding Cabral Gold or generate 73.33% return on investment over 90 days.

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

Altamira Gold Corp  vs.  Cabral Gold

Altamira Gold Corp

Risk-Adjusted Performance

Very Weak

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

Cabral Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cabral Gold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cabral Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altamira Gold and Cabral Gold

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

The idea behind Altamira Gold Corp and Cabral Gold 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.