Correlation Between Highway 50 and Altamira Gold

Can any of the company-specific risk be diversified away by investing in both Highway 50 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 Highway 50 and Altamira Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Highway 50 Gold and Altamira Gold Corp, you can compare the effects of market volatilities on Highway 50 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 Highway 50 with a short position of Altamira Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway 50 and Altamira Gold.

Diversification Opportunities for Highway 50 and Altamira Gold

0.01

Correlation Coefficient

Highway 50  Altamira Gold

Significant diversification

The 3 months correlation between Highway and Altamira is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Highway 50 Gold 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 Highway 50 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 Highway 50 Gold 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 Highway 50 i.e., Highway 50 and Altamira Gold go up and down completely randomly.

Pair Corralation between Highway 50 and Altamira Gold

Assuming the 90 days horizon Highway 50 Gold is expected to under-perform the Altamira Gold. In addition to that, Highway 50 is 1.27 times more volatile than Altamira Gold Corp. It trades about -0.1 of its total potential returns per unit of risk. Altamira Gold Corp is currently generating about -0.08 per unit of volatility. If you would invest  18.00  in Altamira Gold Corp on September 22, 2024 and sell it today you would lose (6.00) from holding Altamira Gold Corp or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.78%
Values	Daily Returns

Highway 50 Gold  vs.  Altamira Gold Corp

Highway 50 Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highway 50 Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Altamira Gold Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altamira Gold Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Altamira Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Highway 50 and Altamira Gold

The main advantage of trading using opposite Highway 50 and Altamira Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway 50 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 Highway 50 Gold 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.