Correlation Between Alphamin Resources and KWG Resources

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

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

Diversification Opportunities for Alphamin Resources and KWG Resources

-0.06

Correlation Coefficient

Alphamin Resources  KWG Resources

Good diversification

The 3 months correlation between Alphamin and KWG is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alphamin Resources Corp and KWG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Resources and Alphamin 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 Alphamin Resources Corp are associated (or correlated) with KWG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Resources has no effect on the direction of Alphamin Resources i.e., Alphamin Resources and KWG Resources go up and down completely randomly.

Pair Corralation between Alphamin Resources and KWG Resources

Assuming the 90 days horizon Alphamin Resources is expected to generate 9.3 times less return on investment than KWG Resources. But when comparing it to its historical volatility, Alphamin Resources Corp is 3.16 times less risky than KWG Resources. It trades about 0.02 of its potential returns per unit of risk. KWG Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1.35  in KWG Resources on May 7, 2025 and sell it today you would earn a total of  0.15  from holding KWG Resources or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.19%
Values	Daily Returns

Alphamin Resources Corp  vs.  KWG Resources

Alphamin Resources Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Alphamin Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Alphamin Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KWG Resources

Risk-Adjusted Performance

Weakest

Over the last 90 days KWG Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, KWG Resources is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alphamin Resources and KWG Resources

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

The idea behind Alphamin Resources Corp and KWG Resources 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.