Correlation Between Almaden Minerals and West African
Can any of the company-specific risk be diversified away by investing in both Almaden Minerals and West African 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 West African into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almaden Minerals and West African Resources, you can compare the effects of market volatilities on Almaden Minerals and West African 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 West African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almaden Minerals and West African.
Diversification Opportunities for Almaden Minerals and West African
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Almaden and West is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and West African Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West African 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 West African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West African Resources has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and West African go up and down completely randomly.
Pair Corralation between Almaden Minerals and West African
Considering the 90-day investment horizon Almaden Minerals is expected to under-perform the West African. But the stock apears to be less risky and, when comparing its historical volatility, Almaden Minerals is 2.47 times less risky than West African. The stock trades about -0.07 of its potential returns per unit of risk. The West African Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 83.00 in West African Resources on October 21, 2024 and sell it today you would earn a total of 19.00 from holding West African Resources or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 24.4% |
| Values | Daily Returns |
Almaden Minerals vs. West African Resources
Performance |
| Timeline |
| Almaden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| West African Resources |
Almaden Minerals and West African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almaden Minerals and West African
The main advantage of trading using opposite Almaden Minerals and West African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almaden Minerals position performs unexpectedly, West African 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 West African will offset losses from the drop in West African's long position.| Almaden Minerals vs. Antioquia Gold | Almaden Minerals vs. Asante Gold | Almaden Minerals vs. Bluestone Resources | Almaden Minerals vs. Big Ridge Gold |
| West African vs. Harmony Gold Mining | West African vs. AngloGold Ashanti plc | West African vs. Gold Fields Ltd | West African vs. Kinross Gold |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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