Correlation Between Radisson Mining and Minera Alamos

Can any of the company-specific risk be diversified away by investing in both Radisson 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 Radisson 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 Radisson Mining Resources and Minera Alamos, you can compare the effects of market volatilities on Radisson 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 Radisson Mining with a short position of Minera Alamos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radisson Mining and Minera Alamos.

Diversification Opportunities for Radisson Mining and Minera Alamos

0.68

Correlation Coefficient

Radisson Mining  Minera Alamos

Poor diversification

The 3 months correlation between Radisson and Minera is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Radisson Mining Resources and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos and Radisson 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 Radisson Mining Resources 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 Radisson Mining i.e., Radisson Mining and Minera Alamos go up and down completely randomly.

Pair Corralation between Radisson Mining and Minera Alamos

Assuming the 90 days horizon Radisson Mining Resources is expected to generate 1.16 times more return on investment than Minera Alamos. However, Radisson Mining is 1.16 times more volatile than Minera Alamos. It trades about -0.06 of its potential returns per unit of risk. Minera Alamos is currently generating about -0.27 per unit of risk. If you would invest  20.00  in Radisson Mining Resources on August 30, 2024 and sell it today you would lose (2.00) from holding Radisson Mining Resources or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Radisson Mining Resources  vs.  Minera Alamos

Radisson Mining Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radisson Mining Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, Radisson Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Minera Alamos

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Minera Alamos are ranked lower than 5 (%) 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 Radisson Mining and Minera Alamos

The main advantage of trading using opposite Radisson Mining and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radisson 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 Radisson Mining Resources 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.