Correlation Between Altius Minerals and China Gold

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Can any of the company-specific risk be diversified away by investing in both Altius Minerals and China 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 Altius Minerals and China Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altius Minerals and China Gold International, you can compare the effects of market volatilities on Altius Minerals and China 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 Altius Minerals with a short position of China Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altius Minerals and China Gold.

Diversification Opportunities for Altius Minerals and China Gold

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Altius and China is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Altius Minerals and China Gold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gold International 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 China Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gold International has no effect on the direction of Altius Minerals i.e., Altius Minerals and China Gold go up and down completely randomly.

Pair Corralation between Altius Minerals and China Gold

Assuming the 90 days trading horizon Altius Minerals is expected to generate 1.62 times less return on investment than China Gold. But when comparing it to its historical volatility, Altius Minerals is 1.24 times less risky than China Gold. It trades about 0.41 of its potential returns per unit of risk. China Gold International is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest  637.00  in China Gold International on December 29, 2023 and sell it today you would earn a total of  227.00  from holding China Gold International or generate 35.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Altius Minerals  vs.  China Gold International

 Performance 
       Timeline  
Altius Minerals 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Altius Minerals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Altius Minerals may actually be approaching a critical reversion point that can send shares even higher in April 2024.
China Gold International 

Risk-Adjusted Performance

21 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in China Gold International are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, China Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Altius Minerals and China Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altius Minerals and China Gold

The main advantage of trading using opposite Altius Minerals and China Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altius Minerals position performs unexpectedly, China 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 China Gold will offset losses from the drop in China Gold's long position.
The idea behind Altius Minerals and China Gold International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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