Correlation Between Altamira Gold and White Gold

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

Diversification Opportunities for Altamira Gold and White Gold

0.29

Correlation Coefficient

Altamira Gold  White Gold

Modest diversification

The 3 months correlation between Altamira and White is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Altamira Gold Corp and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp 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 White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of Altamira Gold i.e., Altamira Gold and White Gold go up and down completely randomly.

Pair Corralation between Altamira Gold and White Gold

Assuming the 90 days horizon Altamira Gold is expected to generate 2.58 times less return on investment than White Gold. But when comparing it to its historical volatility, Altamira Gold Corp is 1.14 times less risky than White Gold. It trades about 0.01 of its potential returns per unit of risk. White Gold Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  15.00  in White Gold Corp on December 23, 2024 and sell it today you would earn a total of  0.00  from holding White Gold Corp 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.  White Gold Corp

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.

White Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in White Gold Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, White Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Altamira Gold and White Gold

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

The idea behind Altamira Gold Corp and White Gold Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..