Correlation Between Minera Alamos and Metallic Minerals

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

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

Diversification Opportunities for Minera Alamos and Metallic Minerals

0.61

Correlation Coefficient

Minera Alamos  Metallic Minerals

Poor diversification

The 3 months correlation between Minera and Metallic is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Minera Alamos and Metallic Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallic Minerals Corp and Minera Alamos 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 Minera Alamos are associated (or correlated) with Metallic Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallic Minerals Corp has no effect on the direction of Minera Alamos i.e., Minera Alamos and Metallic Minerals go up and down completely randomly.

Pair Corralation between Minera Alamos and Metallic Minerals

Assuming the 90 days horizon Minera Alamos is expected to generate 0.58 times more return on investment than Metallic Minerals. However, Minera Alamos is 1.72 times less risky than Metallic Minerals. It trades about 0.02 of its potential returns per unit of risk. Metallic Minerals Corp is currently generating about -0.05 per unit of risk. If you would invest  28.00  in Minera Alamos on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Minera Alamos or generate 0.0% return on investment over 90 days.

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

Minera Alamos  vs.  Metallic Minerals Corp

Minera Alamos

Risk-Adjusted Performance

1 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Minera Alamos are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Minera Alamos is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Metallic Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metallic Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal 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.

Pair Trading with Minera Alamos and Metallic Minerals

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

The idea behind Minera Alamos and Metallic Minerals 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.