Correlation Between Jervois Mining and Altius Minerals

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

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

Diversification Opportunities for Jervois Mining and Altius Minerals

0.2

Correlation Coefficient

Jervois Mining  Altius Minerals

Modest diversification

The 3 months correlation between Jervois and Altius is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jervois Mining and Altius Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Minerals and Jervois Mining 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 Jervois Mining are associated (or correlated) with Altius Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Minerals has no effect on the direction of Jervois Mining i.e., Jervois Mining and Altius Minerals go up and down completely randomly.

Pair Corralation between Jervois Mining and Altius Minerals

Assuming the 90 days horizon Jervois Mining is expected to generate 0.88 times more return on investment than Altius Minerals. However, Jervois Mining is 1.13 times less risky than Altius Minerals. It trades about 0.08 of its potential returns per unit of risk. Altius Minerals is currently generating about -0.05 per unit of risk. If you would invest  0.80  in Jervois Mining on December 29, 2024 and sell it today you would earn a total of  0.06  from holding Jervois Mining or generate 7.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Jervois Mining  vs.  Altius Minerals

Jervois Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jervois Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Jervois Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Altius Minerals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Jervois Mining and Altius Minerals

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

The idea behind Jervois Mining and Altius Minerals 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.