Correlation Between Andean Silver and FSA
Can any of the company-specific risk be diversified away by investing in both Andean Silver and FSA 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 Andean Silver and FSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andean Silver Limited and FSA Group, you can compare the effects of market volatilities on Andean Silver and FSA 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 Andean Silver with a short position of FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andean Silver and FSA.
Diversification Opportunities for Andean Silver and FSA
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Andean and FSA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Andean Silver Limited and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group and Andean 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 Andean Silver Limited are associated (or correlated) with FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Andean Silver i.e., Andean Silver and FSA go up and down completely randomly.
Pair Corralation between Andean Silver and FSA
Assuming the 90 days trading horizon Andean Silver Limited is expected to generate 5.15 times more return on investment than FSA. However, Andean Silver is 5.15 times more volatile than FSA Group. It trades about 0.2 of its potential returns per unit of risk. FSA Group is currently generating about 0.2 per unit of risk. If you would invest 83.00 in Andean Silver Limited on October 26, 2024 and sell it today you would earn a total of 14.00 from holding Andean Silver Limited or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Andean Silver Limited vs. FSA Group
Performance |
| Timeline |
| Andean Silver Limited |
| FSA Group |
Andean Silver and FSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andean Silver and FSA
The main advantage of trading using opposite Andean Silver and FSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andean Silver position performs unexpectedly, FSA 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 FSA will offset losses from the drop in FSA's long position.| Andean Silver vs. Medical Developments International | Andean Silver vs. Tombador Iron | Andean Silver vs. Champion Iron | Andean Silver vs. EMvision Medical Devices |
| FSA vs. Global Health | FSA vs. Ora Banda Mining | FSA vs. Hutchison Telecommunications | FSA vs. Duketon Mining |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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