Correlation Between AbraSilver Resource and Auxico Resources
Can any of the company-specific risk be diversified away by investing in both AbraSilver Resource and Auxico Resources 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 AbraSilver Resource and Auxico Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbraSilver Resource Corp and Auxico Resources Canada, you can compare the effects of market volatilities on AbraSilver Resource and Auxico Resources 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 AbraSilver Resource with a short position of Auxico Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbraSilver Resource and Auxico Resources.
Diversification Opportunities for AbraSilver Resource and Auxico Resources
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AbraSilver and Auxico is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp and Auxico Resources Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxico Resources Canada and AbraSilver Resource 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 AbraSilver Resource Corp are associated (or correlated) with Auxico Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxico Resources Canada has no effect on the direction of AbraSilver Resource i.e., AbraSilver Resource and Auxico Resources go up and down completely randomly.
Pair Corralation between AbraSilver Resource and Auxico Resources
Assuming the 90 days horizon AbraSilver Resource Corp is expected to under-perform the Auxico Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, AbraSilver Resource Corp is 33.99 times less risky than Auxico Resources. The otc stock trades about -0.18 of its potential returns per unit of risk. The Auxico Resources Canada is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Auxico Resources Canada on September 2, 2024 and sell it today you would lose (0.90) from holding Auxico Resources Canada or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AbraSilver Resource Corp vs. Auxico Resources Canada
Performance |
| Timeline |
| AbraSilver Resource Corp |
| Auxico Resources Canada |
AbraSilver Resource and Auxico Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AbraSilver Resource and Auxico Resources
The main advantage of trading using opposite AbraSilver Resource and Auxico Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbraSilver Resource position performs unexpectedly, Auxico Resources 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 Auxico Resources will offset losses from the drop in Auxico Resources' long position.| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. Metallic Minerals Corp | AbraSilver Resource vs. Summa Silver Corp | AbraSilver Resource vs. Honey Badger Silver |
| Auxico Resources vs. Defiance Silver Corp | Auxico Resources vs. HUMANA INC | Auxico Resources vs. SCOR PK | Auxico Resources vs. Aquagold International |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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