Correlation Between Almaden Minerals and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Almaden Minerals and Eastern Platinum 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 Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almaden Minerals and Eastern Platinum Limited, you can compare the effects of market volatilities on Almaden Minerals and Eastern Platinum 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 Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almaden Minerals and Eastern Platinum.
Diversification Opportunities for Almaden Minerals and Eastern Platinum
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Almaden and Eastern is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum 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 Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Eastern Platinum go up and down completely randomly.
Pair Corralation between Almaden Minerals and Eastern Platinum
Assuming the 90 days trading horizon Almaden Minerals is expected to under-perform the Eastern Platinum. In addition to that, Almaden Minerals is 1.4 times more volatile than Eastern Platinum Limited. It trades about -0.05 of its total potential returns per unit of risk. Eastern Platinum Limited is currently generating about -0.06 per unit of volatility. If you would invest 20.00 in Eastern Platinum Limited on August 25, 2024 and sell it today you would lose (2.00) from holding Eastern Platinum Limited or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Almaden Minerals vs. Eastern Platinum Limited
Performance |
| Timeline |
| Almaden Minerals |
| Eastern Platinum |
Almaden Minerals and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almaden Minerals and Eastern Platinum
The main advantage of trading using opposite Almaden Minerals and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almaden Minerals position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| Almaden Minerals vs. Rainy Mountain Royalty | Almaden Minerals vs. Plato Gold Corp | Almaden Minerals vs. Rochester Resources | Almaden Minerals vs. Forstrong Global Income |
| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Centamin PLC | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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