Correlation Between Salazar Resources and Altius Minerals

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

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

Diversification Opportunities for Salazar Resources and Altius Minerals

0.46

Correlation Coefficient

Salazar Resources  Altius Minerals

Very weak diversification

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

Pair Corralation between Salazar Resources and Altius Minerals

Assuming the 90 days horizon Salazar Resources Limited is expected to generate 5.08 times more return on investment than Altius Minerals. However, Salazar Resources is 5.08 times more volatile than Altius Minerals. It trades about 0.03 of its potential returns per unit of risk. Altius Minerals is currently generating about 0.0 per unit of risk. If you would invest  12.00  in Salazar Resources Limited on February 5, 2024 and sell it today you would lose (5.53) from holding Salazar Resources Limited or give up 46.08% of portfolio value over 90 days.

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

Salazar Resources Limited  vs.  Altius Minerals

Salazar Resources

Risk-Adjusted Performance

4 of 100

Insignificant

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

Altius Minerals

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altius Minerals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Altius Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salazar Resources and Altius Minerals

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

The idea behind Salazar Resources Limited and Altius 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.