Correlation Between Aston Bay and Denison Mines

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

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

Diversification Opportunities for Aston Bay and Denison Mines

-0.38

Correlation Coefficient

Aston Bay  Denison Mines

Very good diversification

The 3 months correlation between Aston and Denison is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aston Bay Holdings and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp and Aston Bay 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 Aston Bay Holdings are associated (or correlated) with Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Aston Bay i.e., Aston Bay and Denison Mines go up and down completely randomly.

Pair Corralation between Aston Bay and Denison Mines

Assuming the 90 days horizon Aston Bay Holdings is expected to generate 2.41 times more return on investment than Denison Mines. However, Aston Bay is 2.41 times more volatile than Denison Mines Corp. It trades about 0.0 of its potential returns per unit of risk. Denison Mines Corp is currently generating about -0.03 per unit of risk. If you would invest  7.00  in Aston Bay Holdings on October 9, 2024 and sell it today you would lose (0.50) from holding Aston Bay Holdings or give up 7.14% of portfolio value over 90 days.

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

Aston Bay Holdings  vs.  Denison Mines Corp

Aston Bay Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aston Bay Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Denison Mines Corp

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Denison Mines Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Denison Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aston Bay and Denison Mines

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

The idea behind Aston Bay Holdings and Denison Mines 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.