Correlation Between Blue Star and Almadex Minerals

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

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

Diversification Opportunities for Blue Star and Almadex Minerals

0.76

Correlation Coefficient

Blue Star  Almadex Minerals

Poor diversification

The 3 months correlation between Blue and Almadex is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Gold and Almadex Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almadex Minerals and Blue Star 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 Blue Star Gold are associated (or correlated) with Almadex Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almadex Minerals has no effect on the direction of Blue Star i.e., Blue Star and Almadex Minerals go up and down completely randomly.

Pair Corralation between Blue Star and Almadex Minerals

Assuming the 90 days horizon Blue Star is expected to generate 1.63 times less return on investment than Almadex Minerals. But when comparing it to its historical volatility, Blue Star Gold is 2.92 times less risky than Almadex Minerals. It trades about 0.25 of its potential returns per unit of risk. Almadex Minerals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  9.84  in Almadex Minerals on December 26, 2024 and sell it today you would earn a total of  10.16  from holding Almadex Minerals or generate 103.25% return on investment over 90 days.

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

Blue Star Gold  vs.  Almadex Minerals

Blue Star Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Star Gold are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Blue Star reported solid returns over the last few months and may actually be approaching a breakup point.

Almadex Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Almadex Minerals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Almadex Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Star and Almadex Minerals

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

The idea behind Blue Star Gold and Almadex 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..