Correlation Between Omineca Mining and Minera Alamos

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

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

Diversification Opportunities for Omineca Mining and Minera Alamos

-0.28

Correlation Coefficient

Omineca Mining  Minera Alamos

Very good diversification

The 3 months correlation between Omineca and Minera is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Omineca Mining and and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos and Omineca 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 Omineca Mining and are associated (or correlated) with Minera Alamos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minera Alamos has no effect on the direction of Omineca Mining i.e., Omineca Mining and Minera Alamos go up and down completely randomly.

Pair Corralation between Omineca Mining and Minera Alamos

Assuming the 90 days horizon Omineca Mining and is expected to under-perform the Minera Alamos. In addition to that, Omineca Mining is 1.99 times more volatile than Minera Alamos. It trades about -0.03 of its total potential returns per unit of risk. Minera Alamos is currently generating about 0.09 per unit of volatility. If you would invest  18.00  in Minera Alamos on September 1, 2024 and sell it today you would earn a total of  4.00  from holding Minera Alamos or generate 22.22% return on investment over 90 days.

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

Omineca Mining and  vs.  Minera Alamos

Omineca Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omineca Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Minera Alamos

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Minera Alamos are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Minera Alamos reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Omineca Mining and Minera Alamos

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

The idea behind Omineca Mining and and Minera Alamos 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.