Correlation Between Almaden Minerals and West African

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

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

Diversification Opportunities for Almaden Minerals and West African

0.0

Correlation Coefficient

Almaden Minerals  West African

Pay attention - limited upside

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

Pair Corralation between Almaden Minerals and West African

If you would invest  91.00  in West African Resources on December 28, 2024 and sell it today you would earn a total of  35.00  from holding West African Resources or generate 38.46% return on investment over 90 days.

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

Almaden Minerals  vs.  West African Resources

Almaden Minerals

Risk-Adjusted Performance

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 comparatively stable basic indicators, Almaden Minerals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

West African Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in West African Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, West African reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Almaden Minerals and West African

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

The idea behind Almaden Minerals and West African Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.