Correlation Between Bear Creek and Kootenay Silver
Can any of the company-specific risk be diversified away by investing in both Bear Creek and Kootenay 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 Bear Creek and Kootenay Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bear Creek Mining and Kootenay Silver, you can compare the effects of market volatilities on Bear Creek and Kootenay 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 Bear Creek with a short position of Kootenay Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bear Creek and Kootenay Silver.
Diversification Opportunities for Bear Creek and Kootenay Silver
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bear and Kootenay is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bear Creek Mining and Kootenay Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kootenay Silver and Bear Creek 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 Bear Creek Mining are associated (or correlated) with Kootenay Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kootenay Silver has no effect on the direction of Bear Creek i.e., Bear Creek and Kootenay Silver go up and down completely randomly.
Pair Corralation between Bear Creek and Kootenay Silver
Assuming the 90 days horizon Bear Creek Mining is expected to under-perform the Kootenay Silver. In addition to that, Bear Creek is 2.0 times more volatile than Kootenay Silver. It trades about -0.18 of its total potential returns per unit of risk. Kootenay Silver is currently generating about -0.31 per unit of volatility. If you would invest 144.00 in Kootenay Silver on August 28, 2024 and sell it today you would lose (37.00) from holding Kootenay Silver or give up 25.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bear Creek Mining vs. Kootenay Silver
Performance |
| Timeline |
| Bear Creek Mining |
| Kootenay Silver |
Bear Creek and Kootenay Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bear Creek and Kootenay Silver
The main advantage of trading using opposite Bear Creek and Kootenay Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bear Creek position performs unexpectedly, Kootenay 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 Kootenay Silver will offset losses from the drop in Kootenay Silver's long position.| Bear Creek vs. IMPACT Silver Corp | Bear Creek vs. Golden Goliath Resources | Bear Creek vs. Minera Alamos | Bear Creek vs. Chesapeake Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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