Correlation Between CLST Holdings and Denison Mines

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Can any of the company-specific risk be diversified away by investing in both CLST Holdings and Denison Mines 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 CLST Holdings and Denison Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLST Holdings and Denison Mines Corp, you can compare the effects of market volatilities on CLST Holdings and Denison Mines 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 CLST Holdings with a short position of Denison Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLST Holdings and Denison Mines.

Diversification Opportunities for CLST Holdings and Denison Mines

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between CLST and Denison is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CLST Holdings and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp and CLST Holdings 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 CLST Holdings are associated (or correlated) with Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of CLST Holdings i.e., CLST Holdings and Denison Mines go up and down completely randomly.

Pair Corralation between CLST Holdings and Denison Mines

Given the investment horizon of 90 days CLST Holdings is expected to generate 14.08 times more return on investment than Denison Mines. However, CLST Holdings is 14.08 times more volatile than Denison Mines Corp. It trades about 0.13 of its potential returns per unit of risk. Denison Mines Corp is currently generating about 0.04 per unit of risk. If you would invest  1.70  in CLST Holdings on November 2, 2024 and sell it today you would earn a total of  7.30  from holding CLST Holdings or generate 429.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy81.17%
ValuesDaily Returns

CLST Holdings  vs.  Denison Mines Corp

 Performance 
       Timeline  
CLST Holdings 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CLST Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, CLST Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Denison Mines Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Denison Mines Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Denison Mines is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

CLST Holdings and Denison Mines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CLST Holdings and Denison Mines

The main advantage of trading using opposite CLST Holdings and Denison Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLST Holdings position performs unexpectedly, Denison Mines 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 Denison Mines will offset losses from the drop in Denison Mines' long position.
The idea behind CLST Holdings and Denison Mines Corp 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.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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