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
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Almaden and Northern is 0.01. 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
If you would invest 822.00 in Northern Star Resources on August 27, 2024 and sell it today you would earn a total of 308.00 from holding Northern Star Resources or generate 37.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.53% |
| 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. Aurion Resources | Northern Star vs. Liberty Gold Corp | Northern Star vs. Orezone Gold Corp | Northern Star vs. Radisson Mining Resources |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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