Correlation Between Tarku Resources and Altamira Gold

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

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

Diversification Opportunities for Tarku Resources and Altamira Gold

0.46

Correlation Coefficient

Tarku Resources  Altamira Gold

Very weak diversification

The 3 months correlation between Tarku and Altamira is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Tarku Resources and Altamira Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altamira Gold Corp and Tarku Resources 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 Tarku Resources are associated (or correlated) with Altamira Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altamira Gold Corp has no effect on the direction of Tarku Resources i.e., Tarku Resources and Altamira Gold go up and down completely randomly.

Pair Corralation between Tarku Resources and Altamira Gold

Assuming the 90 days horizon Tarku Resources is expected to generate 4.11 times more return on investment than Altamira Gold. However, Tarku Resources is 4.11 times more volatile than Altamira Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Altamira Gold Corp is currently generating about -0.01 per unit of risk. If you would invest  1.50  in Tarku Resources on December 30, 2024 and sell it today you would lose (0.50) from holding Tarku Resources or give up 33.33% of portfolio value over 90 days.

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

Tarku Resources  vs.  Altamira Gold Corp

Tarku Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tarku Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Tarku Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Altamira Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altamira Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Altamira Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Tarku Resources and Altamira Gold

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

The idea behind Tarku Resources and Altamira Gold 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.