Correlation Between Almaden Minerals and Allegro Biodiesel

Can any of the company-specific risk be diversified away by investing in both Almaden Minerals and Allegro Biodiesel 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 Allegro Biodiesel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Almaden Minerals and Allegro Biodiesel Corp, you can compare the effects of market volatilities on Almaden Minerals and Allegro Biodiesel 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 Allegro Biodiesel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almaden Minerals and Allegro Biodiesel.

Diversification Opportunities for Almaden Minerals and Allegro Biodiesel

0.0

Correlation Coefficient

Almaden Minerals  Allegro Biodiesel

Pay attention - limited upside

The 3 months correlation between Almaden and Allegro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Allegro Biodiesel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegro Biodiesel Corp 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 Allegro Biodiesel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegro Biodiesel Corp has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Allegro Biodiesel go up and down completely randomly.

Pair Corralation between Almaden Minerals and Allegro Biodiesel

If you would invest (100.00) in Allegro Biodiesel Corp on January 24, 2024 and sell it today you would earn a total of  100.00  from holding Allegro Biodiesel Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Almaden Minerals  vs.  Allegro Biodiesel Corp

Almaden Minerals

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Almaden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Allegro Biodiesel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allegro Biodiesel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Allegro Biodiesel is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Almaden Minerals and Allegro Biodiesel

The main advantage of trading using opposite Almaden Minerals and Allegro Biodiesel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almaden Minerals position performs unexpectedly, Allegro Biodiesel 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 Allegro Biodiesel will offset losses from the drop in Allegro Biodiesel's long position.

The idea behind Almaden Minerals and Allegro Biodiesel 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.