Correlation Between Infinico Metals and Alamos Gold

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

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

Diversification Opportunities for Infinico Metals and Alamos Gold

-0.6

Correlation Coefficient

Infinico Metals  Alamos Gold

Excellent diversification

The 3 months correlation between Infinico and Alamos is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Infinico Metals i.e., Infinico Metals and Alamos Gold go up and down completely randomly.

Pair Corralation between Infinico Metals and Alamos Gold

Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 8.65 times more return on investment than Alamos Gold. However, Infinico Metals is 8.65 times more volatile than Alamos Gold. It trades about 0.04 of its potential returns per unit of risk. Alamos Gold is currently generating about 0.2 per unit of risk. If you would invest  2.50  in Infinico Metals Corp on November 29, 2024 and sell it today you would lose (1.00) from holding Infinico Metals Corp or give up 40.0% of portfolio value over 90 days.

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

Infinico Metals Corp  vs.  Alamos Gold

Infinico Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infinico Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Infinico Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Alamos Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alamos Gold are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Alamos Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infinico Metals and Alamos Gold

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

The idea behind Infinico Metals Corp and Alamos 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 CEOs Directory module to screen CEOs from public companies around the world.