Correlation Between Champion Iron and Almaden Minerals
Can any of the company-specific risk be diversified away by investing in both Champion Iron and Almaden Minerals 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 Champion Iron and Almaden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and Almaden Minerals, you can compare the effects of market volatilities on Champion Iron and Almaden Minerals 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 Champion Iron with a short position of Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and Almaden Minerals.
Diversification Opportunities for Champion Iron and Almaden Minerals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champion and Almaden is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals and Champion Iron 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 Champion Iron are associated (or correlated) with Almaden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almaden Minerals has no effect on the direction of Champion Iron i.e., Champion Iron and Almaden Minerals go up and down completely randomly.
Pair Corralation between Champion Iron and Almaden Minerals
Assuming the 90 days trading horizon Champion Iron is expected to generate 0.39 times more return on investment than Almaden Minerals. However, Champion Iron is 2.56 times less risky than Almaden Minerals. It trades about 0.01 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.02 per unit of risk. If you would invest 531.00 in Champion Iron on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Champion Iron or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Champion Iron vs. Almaden Minerals
Performance |
| Timeline |
| Champion Iron |
| Almaden Minerals |
Champion Iron and Almaden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and Almaden Minerals
The main advantage of trading using opposite Champion Iron and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, Almaden Minerals 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 Almaden Minerals will offset losses from the drop in Almaden Minerals' long position.| Champion Iron vs. Black Iron | Champion Iron vs. Wesdome Gold Mines | Champion Iron vs. GoGold Resources | Champion Iron vs. Mason Graphite |
| Almaden Minerals vs. Mirasol Resources | Almaden Minerals vs. Minco Silver | Almaden Minerals vs. Radius Gold | Almaden Minerals vs. Solitario Exploration Royalty |
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 Stocks Directory module to find actively traded stocks across global markets.
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