Correlation Between Advent Wireless and Alamos Gold

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

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

Diversification Opportunities for Advent Wireless and Alamos Gold

0.07

Correlation Coefficient

Advent Wireless  Alamos Gold

Significant diversification

The 3 months correlation between Advent and Alamos is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Advent Wireless and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Advent Wireless 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 Advent Wireless 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 Advent Wireless i.e., Advent Wireless and Alamos Gold go up and down completely randomly.

Pair Corralation between Advent Wireless and Alamos Gold

Assuming the 90 days horizon Advent Wireless is expected to under-perform the Alamos Gold. In addition to that, Advent Wireless is 1.02 times more volatile than Alamos Gold. It trades about -0.07 of its total potential returns per unit of risk. Alamos Gold is currently generating about -0.04 per unit of volatility. If you would invest  3,912  in Alamos Gold on April 24, 2025 and sell it today you would lose (325.00) from holding Alamos Gold or give up 8.31% of portfolio value over 90 days.

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

Advent Wireless  vs.  Alamos Gold

Advent Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

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 abnormal 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 Advent Wireless and Alamos Gold

The main advantage of trading using opposite Advent Wireless and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Wireless 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 Advent Wireless 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.