Correlation Between Almaden Minerals and Northern Star
Can any of the company-specific risk be diversified away by investing in both Almaden Minerals and Northern Star 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 Almaden Minerals and Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almaden Minerals and Northern Star Resources, you can compare the effects of market volatilities on Almaden Minerals and Northern Star 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 Almaden Minerals with a short position of Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almaden Minerals and Northern Star.
Diversification Opportunities for Almaden Minerals and Northern Star
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Almaden and Northern is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources and Almaden Minerals 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 Almaden Minerals are associated (or correlated) with Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Northern Star go up and down completely randomly.
Pair Corralation between Almaden Minerals and Northern Star
Considering the 90-day investment horizon Almaden Minerals is expected to under-perform the Northern Star. In addition to that, Almaden Minerals is 1.19 times more volatile than Northern Star Resources. It trades about -0.07 of its total potential returns per unit of risk. Northern Star Resources is currently generating about 0.03 per unit of volatility. If you would invest 820.00 in Northern Star Resources on October 21, 2024 and sell it today you would earn a total of 205.00 from holding Northern Star Resources or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 26.75% |
| Values | Daily Returns |
Almaden Minerals vs. Northern Star Resources
Performance |
| Timeline |
| Almaden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northern Star Resources |
Almaden Minerals and Northern Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almaden Minerals and Northern Star
The main advantage of trading using opposite Almaden Minerals and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almaden Minerals position performs unexpectedly, Northern Star 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 Northern Star will offset losses from the drop in Northern Star's long position.| Almaden Minerals vs. Antioquia Gold | Almaden Minerals vs. Asante Gold | Almaden Minerals vs. Bluestone Resources | Almaden Minerals vs. Big Ridge Gold |
| Northern Star vs. Regis Resources | Northern Star vs. West African Resources | Northern Star vs. Dundee Precious Metals | Northern Star vs. Maple Gold Mines |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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