Correlation Between GMV Minerals and Altamira Gold

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

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

Diversification Opportunities for GMV Minerals and Altamira Gold

-0.08

Correlation Coefficient

GMV Minerals  Altamira Gold

Good diversification

The 3 months correlation between GMV and Altamira is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding GMV Minerals and Altamira Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamira Gold Corp and GMV 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 GMV Minerals are associated (or correlated) with Altamira Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamira Gold Corp has no effect on the direction of GMV Minerals i.e., GMV Minerals and Altamira Gold go up and down completely randomly.

Pair Corralation between GMV Minerals and Altamira Gold

Assuming the 90 days horizon GMV Minerals is expected to generate 1.79 times more return on investment than Altamira Gold. However, GMV Minerals is 1.79 times more volatile than Altamira Gold Corp. It trades about 0.06 of its potential returns per unit of risk. Altamira Gold Corp is currently generating about -0.01 per unit of risk. If you would invest  10.00  in GMV Minerals on December 29, 2024 and sell it today you would earn a total of  1.00  from holding GMV Minerals or generate 10.0% return on investment over 90 days.

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

GMV Minerals  vs.  Altamira Gold Corp

GMV Minerals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GMV Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GMV Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of fairly stable basic indicators, Altamira Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with GMV Minerals and Altamira Gold

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

The idea behind GMV Minerals and Altamira 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.