Correlation Between Desert Mountain and Altima Resources
Can any of the company-specific risk be diversified away by investing in both Desert Mountain and Altima 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 Desert Mountain and Altima Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desert Mountain Energy and Altima Resources, you can compare the effects of market volatilities on Desert Mountain and Altima 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 Desert Mountain with a short position of Altima Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desert Mountain and Altima Resources.
Diversification Opportunities for Desert Mountain and Altima Resources
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Desert and Altima is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Desert Mountain Energy and Altima Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altima Resources and Desert Mountain 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 Desert Mountain Energy are associated (or correlated) with Altima Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altima Resources has no effect on the direction of Desert Mountain i.e., Desert Mountain and Altima Resources go up and down completely randomly.
Pair Corralation between Desert Mountain and Altima Resources
Assuming the 90 days horizon Desert Mountain Energy is expected to generate 0.81 times more return on investment than Altima Resources. However, Desert Mountain Energy is 1.24 times less risky than Altima Resources. It trades about 0.18 of its potential returns per unit of risk. Altima Resources is currently generating about -0.05 per unit of risk. If you would invest 14.00 in Desert Mountain Energy on August 14, 2025 and sell it today you would earn a total of 14.00 from holding Desert Mountain Energy or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desert Mountain Energy vs. Altima Resources
Performance |
| Timeline |
| Desert Mountain Energy |
| Altima Resources |
Desert Mountain and Altima Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desert Mountain and Altima Resources
The main advantage of trading using opposite Desert Mountain and Altima Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desert Mountain position performs unexpectedly, Altima 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 Altima Resources will offset losses from the drop in Altima Resources' long position.| Desert Mountain vs. Jericho Oil Corp | Desert Mountain vs. Eco Oil Gas | Desert Mountain vs. Guardian Exploration | Desert Mountain vs. Wilton Resources |
| Altima Resources vs. Shell PLC ADR | Altima Resources vs. Chevron Corp | Altima Resources vs. Ecopetrol SA ADR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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