Correlation Between Compania Mina and Golden Minerals

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

Diversification Opportunities for Compania Mina and Golden Minerals

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Compania and Golden is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Compania Mina Buenaventura and Golden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Minerals and Compania Mina 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 Compania Mina Buenaventura are associated (or correlated) with Golden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Minerals has no effect on the direction of Compania Mina i.e., Compania Mina and Golden Minerals go up and down completely randomly.

Pair Corralation between Compania Mina and Golden Minerals

Considering the 90-day investment horizon Compania Mina Buenaventura is expected to under-perform the Golden Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Compania Mina Buenaventura is 1.45 times less risky than Golden Minerals. The stock trades about -0.03 of its potential returns per unit of risk. The Golden Minerals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  42.00  in Golden Minerals on April 3, 2022 and sell it today you would lose (6.00)  from holding Golden Minerals or give up 14.29% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Compania Mina Buenaventura  vs.  Golden Minerals

 Performance (%) 
      Timeline 
Compania Mina Buenav 
Compania Performance
0 of 100
Over the last 90 days Compania Mina Buenaventura has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0198
Payout Ratio
0.052
Last Split Factor
2:1
Forward Annual Dividend Rate
0.15
Dividend Date
2022-05-16
Ex Dividend Date
2022-04-21
Last Split Date
2008-07-23

Compania Price Channel

Golden Minerals 
Golden Performance
0 of 100
Over the last 90 days Golden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Golden Price Channel

Compania Mina and Golden Minerals Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Compania Mina and Golden Minerals

The main advantage of trading using opposite Compania Mina and Golden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Mina position performs unexpectedly, Golden Minerals 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 Golden Minerals will offset losses from the drop in Golden Minerals' long position.
The idea behind Compania Mina Buenaventura and Golden Minerals 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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