Correlation Between Dundee Precious and Almaden Minerals
Can any of the company-specific risk be diversified away by investing in both Dundee Precious 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 Dundee Precious and Almaden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dundee Precious Metals and Almaden Minerals, you can compare the effects of market volatilities on Dundee Precious 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 Dundee Precious with a short position of Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dundee Precious and Almaden Minerals.
Diversification Opportunities for Dundee Precious and Almaden Minerals
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dundee and Almaden is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dundee Precious Metals and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals and Dundee Precious 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 Dundee Precious Metals 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 Dundee Precious i.e., Dundee Precious and Almaden Minerals go up and down completely randomly.
Pair Corralation between Dundee Precious and Almaden Minerals
Assuming the 90 days horizon Dundee Precious Metals is expected to generate 0.48 times more return on investment than Almaden Minerals. However, Dundee Precious Metals is 2.08 times less risky than Almaden Minerals. It trades about 0.06 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.07 per unit of risk. If you would invest 580.00 in Dundee Precious Metals on November 2, 2024 and sell it today you would earn a total of 438.00 from holding Dundee Precious Metals or generate 75.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 22.67% |
| Values | Daily Returns |
Dundee Precious Metals vs. Almaden Minerals
Performance |
| Timeline |
| Dundee Precious Metals |
| Almaden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dundee Precious and Almaden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dundee Precious and Almaden Minerals
The main advantage of trading using opposite Dundee Precious and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dundee Precious 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.| Dundee Precious vs. Hummingbird Resources PLC | Dundee Precious vs. Artemis Gold | Dundee Precious vs. Precipitate Gold Corp | Dundee Precious vs. American Eagle Gold |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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