Correlation Between Vestis and Denison Mines

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

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

Diversification Opportunities for Vestis and Denison Mines

0.05

Correlation Coefficient

Vestis  Denison Mines

Significant diversification

The 3 months correlation between Vestis and Denison is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vestis 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 Vestis 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 Vestis 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 Vestis i.e., Vestis and Denison Mines go up and down completely randomly.

Pair Corralation between Vestis and Denison Mines

Given the investment horizon of 90 days Vestis is expected to generate 0.51 times more return on investment than Denison Mines. However, Vestis is 1.96 times less risky than Denison Mines. It trades about -0.02 of its potential returns per unit of risk. Denison Mines Corp is currently generating about -0.12 per unit of risk. If you would invest  1,658  in Vestis on October 11, 2024 and sell it today you would lose (24.00) from holding Vestis or give up 1.45% of portfolio value over 90 days.

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

Vestis  vs.  Denison Mines Corp

Vestis

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vestis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Vestis may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Denison Mines Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Denison Mines Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Denison Mines may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vestis and Denison Mines

The main advantage of trading using opposite Vestis and Denison Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestis 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 Vestis 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.