Correlation Between Altius Minerals and GM
Can any of the company-specific risk be diversified away by investing in both Altius Minerals and GM 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 Altius Minerals and GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altius Minerals and General Motors, you can compare the effects of market volatilities on Altius Minerals and GM 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 Altius Minerals with a short position of GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altius Minerals and GM.
Diversification Opportunities for Altius Minerals and GM
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altius and GM is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Altius Minerals and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Altius Minerals 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 Altius Minerals are associated (or correlated) with GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Altius Minerals i.e., Altius Minerals and GM go up and down completely randomly.
Pair Corralation between Altius Minerals and GM
Assuming the 90 days trading horizon Altius Minerals is expected to generate 1.03 times less return on investment than GM. But when comparing it to its historical volatility, Altius Minerals is 1.08 times less risky than GM. It trades about 0.02 of its potential returns per unit of risk. General Motors is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,799 in General Motors on January 20, 2024 and sell it today you would earn a total of 445.00 from holding General Motors or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Altius Minerals vs. General Motors
Performance |
| Timeline |
| Altius Minerals |
| General Motors |
Altius Minerals and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altius Minerals and GM
The main advantage of trading using opposite Altius Minerals and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altius Minerals position performs unexpectedly, GM 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 GM will offset losses from the drop in GM's long position.| Altius Minerals vs. Almaden Minerals | Altius Minerals vs. Mirasol Resources | Altius Minerals vs. EMX Royalty Corp | Altius Minerals vs. Globex Mining Enterprises |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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