Correlation Between Auxico Resources and Southern Silver
Can any of the company-specific risk be diversified away by investing in both Auxico Resources and Southern 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 Southern 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 Southern Silver Exploration, you can compare the effects of market volatilities on Auxico Resources and Southern 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 Southern Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auxico Resources and Southern Silver.
Diversification Opportunities for Auxico Resources and Southern Silver
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auxico and Southern is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Auxico Resources Canada and Southern Silver Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Silver Expl 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 Southern Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Silver Expl has no effect on the direction of Auxico Resources i.e., Auxico Resources and Southern Silver go up and down completely randomly.
Pair Corralation between Auxico Resources and Southern Silver
Assuming the 90 days horizon Auxico Resources Canada is expected to generate 9.06 times more return on investment than Southern Silver. However, Auxico Resources is 9.06 times more volatile than Southern Silver Exploration. It trades about 0.08 of its potential returns per unit of risk. Southern Silver Exploration is currently generating about 0.0 per unit of risk. If you would invest 5.00 in Auxico Resources Canada on September 3, 2024 and sell it today you would lose (4.40) from holding Auxico Resources Canada or give up 88.0% 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. Southern Silver Exploration
Performance |
| Timeline |
| Auxico Resources Canada |
| Southern Silver Expl |
Auxico Resources and Southern Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auxico Resources and Southern Silver
The main advantage of trading using opposite Auxico Resources and Southern Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auxico Resources position performs unexpectedly, Southern 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 Southern Silver will offset losses from the drop in Southern Silver's long position.| Auxico Resources vs. Cartier Iron Corp | Auxico Resources vs. Arctic Star Exploration | Auxico Resources vs. Capella Minerals Limited | Auxico Resources vs. Denarius Silver Corp |
| Southern Silver vs. Star Royalties | Southern Silver vs. Defiance Silver Corp | Southern Silver vs. Diamond Fields Resources | Southern Silver vs. GoGold Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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