Correlation Between Gold Terra and Altamira Gold

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

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

Diversification Opportunities for Gold Terra and Altamira Gold

0.35

Correlation Coefficient

Gold Terra  Altamira Gold

Weak diversification

The 3 months correlation between Gold and Altamira is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gold Terra Resource 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 Gold Terra 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 Gold Terra Resource 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 Gold Terra i.e., Gold Terra and Altamira Gold go up and down completely randomly.

Pair Corralation between Gold Terra and Altamira Gold

Assuming the 90 days horizon Gold Terra Resource is expected to generate 1.41 times more return on investment than Altamira Gold. However, Gold Terra is 1.41 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 -0.02 per unit of risk. If you would invest  4.11  in Gold Terra Resource on September 22, 2024 and sell it today you would earn a total of  0.04  from holding Gold Terra Resource or generate 0.97% return on investment over 90 days.

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

Gold Terra Resource  vs.  Altamira Gold Corp

Gold Terra Resource

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Terra Resource are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Gold Terra reported solid returns over the last few months and may actually be approaching a breakup point.

Altamira Gold Corp

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Gold Terra and Altamira Gold

The main advantage of trading using opposite Gold Terra and Altamira Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Terra 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 Gold Terra Resource 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.