Correlation Between Almaden Minerals and Entree Resources
Can any of the company-specific risk be diversified away by investing in both Almaden Minerals and Entree 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 Almaden Minerals and Entree Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almaden Minerals and Entree Resources, you can compare the effects of market volatilities on Almaden Minerals and Entree 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 Almaden Minerals with a short position of Entree Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almaden Minerals and Entree Resources.
Diversification Opportunities for Almaden Minerals and Entree Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Almaden and Entree is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Entree Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entree 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 Entree Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entree Resources has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Entree Resources go up and down completely randomly.
Pair Corralation between Almaden Minerals and Entree Resources
Assuming the 90 days trading horizon Almaden Minerals is expected to under-perform the Entree Resources. In addition to that, Almaden Minerals is 1.57 times more volatile than Entree Resources. It trades about -0.13 of its total potential returns per unit of risk. Entree Resources is currently generating about 0.0 per unit of volatility. If you would invest 199.00 in Entree Resources on August 28, 2024 and sell it today you would lose (4.00) from holding Entree Resources or give up 2.01% 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. Entree Resources
Performance |
| Timeline |
| Almaden Minerals |
| Entree Resources |
Almaden Minerals and Entree Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almaden Minerals and Entree Resources
The main advantage of trading using opposite Almaden Minerals and Entree Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almaden Minerals position performs unexpectedly, Entree 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 Entree Resources will offset losses from the drop in Entree Resources' long position.The idea behind Almaden Minerals and Entree Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Entree Resources vs. First Majestic Silver | Entree Resources vs. Ivanhoe Energy | Entree Resources vs. Orezone Gold Corp | Entree Resources vs. Faraday Copper Corp |
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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