Correlation Between Sayona Mining and CanAlaska Uranium

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

By analyzing existing cross correlation between Sayona Mining Limited and CanAlaska Uranium, you can compare the effects of market volatilities on Sayona Mining and CanAlaska Uranium 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 Sayona Mining with a short position of CanAlaska Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sayona Mining and CanAlaska Uranium.

Diversification Opportunities for Sayona Mining and CanAlaska Uranium

0.47

Correlation Coefficient

Sayona Mining  CanAlaska Uranium

Very weak diversification

The 3 months correlation between Sayona and CanAlaska is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining Limited and CanAlaska Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanAlaska Uranium and Sayona Mining 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 Sayona Mining Limited are associated (or correlated) with CanAlaska Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanAlaska Uranium has no effect on the direction of Sayona Mining i.e., Sayona Mining and CanAlaska Uranium go up and down completely randomly.

Pair Corralation between Sayona Mining and CanAlaska Uranium

Assuming the 90 days horizon Sayona Mining Limited is expected to under-perform the CanAlaska Uranium. In addition to that, Sayona Mining is 2.37 times more volatile than CanAlaska Uranium. It trades about -0.03 of its total potential returns per unit of risk. CanAlaska Uranium is currently generating about -0.04 per unit of volatility. If you would invest  54.00  in CanAlaska Uranium on September 26, 2024 and sell it today you would lose (6.00) from holding CanAlaska Uranium or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Sayona Mining Limited  vs.  CanAlaska Uranium

Sayona Mining Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sayona Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CanAlaska Uranium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CanAlaska Uranium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sayona Mining and CanAlaska Uranium

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

The idea behind Sayona Mining Limited and CanAlaska Uranium 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.