Correlation Between Almaden Minerals and Cordoba Minerals

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

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

Diversification Opportunities for Almaden Minerals and Cordoba Minerals

0.58

Correlation Coefficient

Almaden Minerals  Cordoba Minerals

Very weak diversification

The 3 months correlation between Almaden and Cordoba is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Almaden Minerals and Cordoba Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cordoba Minerals 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 Cordoba Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cordoba Minerals Corp has no effect on the direction of Almaden Minerals i.e., Almaden Minerals and Cordoba Minerals go up and down completely randomly.

Pair Corralation between Almaden Minerals and Cordoba Minerals

Assuming the 90 days trading horizon Almaden Minerals is expected to generate 1.76 times more return on investment than Cordoba Minerals. However, Almaden Minerals is 1.76 times more volatile than Cordoba Minerals Corp. It trades about 0.06 of its potential returns per unit of risk. Cordoba Minerals Corp is currently generating about 0.04 per unit of risk. If you would invest  5.00  in Almaden Minerals on September 13, 2024 and sell it today you would earn a total of  0.50  from holding Almaden Minerals or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Almaden Minerals  vs.  Cordoba Minerals Corp

Almaden Minerals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Almaden Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Almaden Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Cordoba Minerals Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cordoba Minerals Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cordoba Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Almaden Minerals and Cordoba Minerals

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

The idea behind Almaden Minerals and Cordoba Minerals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.