Correlation Between Auxico Resources and Defiance Silver
Can any of the company-specific risk be diversified away by investing in both Auxico Resources and Defiance Silver 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 Auxico Resources and Defiance Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auxico Resources Canada and Defiance Silver Corp, you can compare the effects of market volatilities on Auxico Resources and Defiance Silver 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 Auxico Resources with a short position of Defiance Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxico Resources and Defiance Silver.
Diversification Opportunities for Auxico Resources and Defiance Silver
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auxico and Defiance is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Auxico Resources Canada and Defiance Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Silver Corp and Auxico Resources 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 Auxico Resources Canada are associated (or correlated) with Defiance Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Silver Corp has no effect on the direction of Auxico Resources i.e., Auxico Resources and Defiance Silver go up and down completely randomly.
Pair Corralation between Auxico Resources and Defiance Silver
Assuming the 90 days horizon Auxico Resources Canada is expected to generate 6.06 times more return on investment than Defiance Silver. However, Auxico Resources is 6.06 times more volatile than Defiance Silver Corp. It trades about 0.07 of its potential returns per unit of risk. Defiance Silver Corp is currently generating about 0.04 per unit of risk. If you would invest 28.00 in Auxico Resources Canada on September 1, 2024 and sell it today you would lose (27.40) from holding Auxico Resources Canada or give up 97.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auxico Resources Canada vs. Defiance Silver Corp
Performance |
| Timeline |
| Auxico Resources Canada |
| Defiance Silver Corp |
Auxico Resources and Defiance Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auxico Resources and Defiance Silver
The main advantage of trading using opposite Auxico Resources and Defiance Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxico Resources position performs unexpectedly, Defiance Silver 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 Defiance Silver will offset losses from the drop in Defiance Silver's long position.| Auxico Resources vs. Defiance Silver Corp | Auxico Resources vs. HUMANA INC | Auxico Resources vs. SCOR PK | Auxico Resources vs. Aquagold International |
| Defiance Silver vs. Aftermath Silver | Defiance Silver vs. AbraSilver Resource Corp | Defiance Silver vs. Southern Silver Exploration | Defiance Silver vs. Blackrock Silver Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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