Correlation Between Denison Mines and ANZNZ

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

By analyzing existing cross correlation between Denison Mines Corp and ANZNZ 125 22 JUN 26, you can compare the effects of market volatilities on Denison Mines and ANZNZ 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 Denison Mines with a short position of ANZNZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denison Mines and ANZNZ.

Diversification Opportunities for Denison Mines and ANZNZ

0.31

Correlation Coefficient

Denison Mines  ANZNZ

Weak diversification

The 3 months correlation between Denison and ANZNZ is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Denison Mines Corp and ANZNZ 125 22 JUN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZNZ 125 22 and Denison Mines 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 Denison Mines Corp are associated (or correlated) with ANZNZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZNZ 125 22 has no effect on the direction of Denison Mines i.e., Denison Mines and ANZNZ go up and down completely randomly.

Pair Corralation between Denison Mines and ANZNZ

Considering the 90-day investment horizon Denison Mines Corp is expected to under-perform the ANZNZ. In addition to that, Denison Mines is 3.13 times more volatile than ANZNZ 125 22 JUN 26. It trades about -0.03 of its total potential returns per unit of risk. ANZNZ 125 22 JUN 26 is currently generating about 0.02 per unit of volatility. If you would invest  9,476  in ANZNZ 125 22 JUN 26 on October 27, 2024 and sell it today you would earn a total of  50.00  from holding ANZNZ 125 22 JUN 26 or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	43.33%
Values	Daily Returns

Denison Mines Corp  vs.  ANZNZ 125 22 JUN 26

Denison Mines Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Denison Mines Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Denison Mines is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ANZNZ 125 22

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANZNZ 125 22 JUN 26 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ANZNZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Denison Mines and ANZNZ

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

The idea behind Denison Mines Corp and ANZNZ 125 22 JUN 26 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.