Correlation Between Alvopetro Energy and Alamos Gold

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

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

Diversification Opportunities for Alvopetro Energy and Alamos Gold

-0.5

Correlation Coefficient

Alvopetro Energy  Alamos Gold

Very good diversification

The 3 months correlation between Alvopetro and Alamos is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alvopetro Energy and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Alvopetro Energy 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 Alvopetro Energy are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Alvopetro Energy i.e., Alvopetro Energy and Alamos Gold go up and down completely randomly.

Pair Corralation between Alvopetro Energy and Alamos Gold

Assuming the 90 days horizon Alvopetro Energy is expected to generate 0.86 times more return on investment than Alamos Gold. However, Alvopetro Energy is 1.17 times less risky than Alamos Gold. It trades about 0.16 of its potential returns per unit of risk. Alamos Gold is currently generating about -0.03 per unit of risk. If you would invest  517.00  in Alvopetro Energy on March 30, 2025 and sell it today you would earn a total of  131.00  from holding Alvopetro Energy or generate 25.34% return on investment over 90 days.

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

Alvopetro Energy  vs.  Alamos Gold

Alvopetro Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alvopetro Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Alvopetro Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Alamos Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alamos Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alvopetro Energy and Alamos Gold

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

The idea behind Alvopetro Energy and Alamos Gold 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..