Correlation Between T.J. Maxx and Almaden Minerals

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

By analyzing existing cross correlation between The TJX Companies and Almaden Minerals, you can compare the effects of market volatilities on T.J. Maxx 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 T.J. Maxx with a short position of Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of T.J. Maxx and Almaden Minerals.

Diversification Opportunities for T.J. Maxx and Almaden Minerals

0.08

Correlation Coefficient

T.J. Maxx  Almaden Minerals

Significant diversification

The 3 months correlation between T.J. and Almaden is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The TJX Companies and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals and T.J. Maxx 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 The TJX Companies 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 T.J. Maxx i.e., T.J. Maxx and Almaden Minerals go up and down completely randomly.

Pair Corralation between T.J. Maxx and Almaden Minerals

Considering the 90-day investment horizon The TJX Companies is expected to generate 0.24 times more return on investment than Almaden Minerals. However, The TJX Companies is 4.13 times less risky than Almaden Minerals. It trades about 0.07 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.05 per unit of risk. If you would invest  6,199  in The TJX Companies on January 24, 2024 and sell it today you would earn a total of  3,209  from holding The TJX Companies or generate 51.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.98%
Values	Daily Returns

The TJX Companies  vs.  Almaden Minerals

TJX Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The TJX Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking indicators, T.J. Maxx is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Almaden Minerals

Risk-Adjusted Performance

0 of 100

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 weak 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.

Pair Trading with T.J. Maxx and Almaden Minerals

The main advantage of trading using opposite T.J. Maxx and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T.J. Maxx 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.

The idea behind The TJX Companies and Almaden 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.