Correlation Between Santacruz Silver and Silver Mines
Can any of the company-specific risk be diversified away by investing in both Santacruz Silver and Silver 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 Santacruz Silver and Silver Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santacruz Silver Mining and Silver Mines Limited, you can compare the effects of market volatilities on Santacruz Silver and Silver 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 Santacruz Silver with a short position of Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santacruz Silver and Silver Mines.
Diversification Opportunities for Santacruz Silver and Silver Mines
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santacruz and Silver is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Santacruz Silver Mining and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited and Santacruz Silver 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 Santacruz Silver Mining are associated (or correlated) with Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Santacruz Silver i.e., Santacruz Silver and Silver Mines go up and down completely randomly.
Pair Corralation between Santacruz Silver and Silver Mines
Assuming the 90 days horizon Santacruz Silver Mining is expected to generate 1.21 times more return on investment than Silver Mines. However, Santacruz Silver is 1.21 times more volatile than Silver Mines Limited. It trades about 0.01 of its potential returns per unit of risk. Silver Mines Limited is currently generating about -0.11 per unit of risk. If you would invest 20.00 in Santacruz Silver Mining on September 23, 2024 and sell it today you would lose (1.00) from holding Santacruz Silver Mining or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santacruz Silver Mining vs. Silver Mines Limited
Performance |
| Timeline |
| Santacruz Silver Mining |
| Silver Mines Limited |
Santacruz Silver and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santacruz Silver and Silver Mines
The main advantage of trading using opposite Santacruz Silver and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santacruz Silver position performs unexpectedly, Silver 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 Silver Mines will offset losses from the drop in Silver Mines' long position.| Santacruz Silver vs. Pan American Silver | Santacruz Silver vs. First Majestic Silver | Santacruz Silver vs. MAG Silver Corp | Santacruz Silver vs. Silvercorp Metals |
| Silver Mines vs. Pan American Silver | Silver Mines vs. First Majestic Silver | Silver Mines vs. MAG Silver Corp | Silver Mines vs. Silvercorp Metals |
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.
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