Correlation Between Almaden Minerals and Cameco Corp

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

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

Diversification Opportunities for Almaden Minerals and Cameco Corp

0.2

Correlation Coefficient

Almaden Minerals  Cameco Corp

Modest diversification

The 3 months correlation between Almaden and Cameco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Cameco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameco 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 Cameco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameco Corp has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Cameco Corp go up and down completely randomly.

Pair Corralation between Almaden Minerals and Cameco Corp

If you would invest  4,198  in Cameco Corp on January 20, 2024 and sell it today you would earn a total of  619.00  from holding Cameco Corp or generate 14.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Almaden Minerals  vs.  Cameco Corp

Almaden Minerals

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Almaden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile basic indicators, Almaden Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cameco Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cameco Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Cameco Corp may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Almaden Minerals and Cameco Corp

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

The idea behind Almaden Minerals and Cameco 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.