Correlation Between Alexco Resource and Golden Minerals

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

By analyzing existing cross correlation between Alexco Resource Corp and Golden Minerals, you can compare the effects of market volatilities on Alexco Resource and Golden 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 Alexco Resource with a short position of Golden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexco Resource and Golden Minerals.

Diversification Opportunities for Alexco Resource and Golden Minerals

0.0

Correlation Coefficient

Alexco Resource  Golden Minerals

Pay attention - limited upside

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

Pair Corralation between Alexco Resource and Golden Minerals

If you would invest  30.00  in Golden Minerals on January 18, 2024 and sell it today you would earn a total of  35.00  from holding Golden Minerals or generate 116.67% return on investment over 90 days.

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

Alexco Resource Corp  vs.  Golden Minerals

Alexco Resource Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Golden Minerals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Minerals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, Golden Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alexco Resource and Golden Minerals

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

The idea behind Alexco Resource Corp and Golden Minerals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.