Correlation Between Nates Food and Denison Mines

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

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

Diversification Opportunities for Nates Food and Denison Mines

-0.54

Correlation Coefficient

Nates Food  Denison Mines

Excellent diversification

The 3 months correlation between Nates and Denison is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nates Food Co 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 Nates Food 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 Nates Food Co 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 Nates Food i.e., Nates Food and Denison Mines go up and down completely randomly.

Pair Corralation between Nates Food and Denison Mines

Given the investment horizon of 90 days Nates Food Co is expected to generate 56.08 times more return on investment than Denison Mines. However, Nates Food is 56.08 times more volatile than Denison Mines Corp. It trades about 0.23 of its potential returns per unit of risk. Denison Mines Corp is currently generating about -0.09 per unit of risk. If you would invest  0.00  in Nates Food Co on December 19, 2024 and sell it today you would earn a total of  0.01  from holding Nates Food Co or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.14%
Values	Daily Returns

Nates Food Co  vs.  Denison Mines Corp

Nates Food

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nates Food Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, Nates Food exhibited solid returns over the last few months and may actually be approaching a breakup point.

Denison Mines Corp

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Nates Food and Denison Mines

The main advantage of trading using opposite Nates Food and Denison Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nates Food 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 Nates Food Co 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.

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.