Correlation Between Central Asia and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Central Asia and SilverCrest Metals 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 Central Asia and SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and SilverCrest Metals, you can compare the effects of market volatilities on Central Asia and SilverCrest Metals 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 Central Asia with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and SilverCrest Metals.
Diversification Opportunities for Central Asia and SilverCrest Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Central and SilverCrest is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Central Asia 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 Central Asia Metals are associated (or correlated) with SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Central Asia i.e., Central Asia and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Central Asia and SilverCrest Metals
Assuming the 90 days trading horizon Central Asia is expected to generate 19.48 times less return on investment than SilverCrest Metals. But when comparing it to its historical volatility, Central Asia Metals is 2.36 times less risky than SilverCrest Metals. It trades about 0.02 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 721.00 in SilverCrest Metals on September 4, 2024 and sell it today you would earn a total of 674.00 from holding SilverCrest Metals or generate 93.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 43.34% |
| Values | Daily Returns |
Central Asia Metals vs. SilverCrest Metals
Performance |
| Timeline |
| Central Asia Metals |
| SilverCrest Metals |
Central Asia and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and SilverCrest Metals
The main advantage of trading using opposite Central Asia and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| Central Asia vs. Givaudan SA | Central Asia vs. Antofagasta PLC | Central Asia vs. Atalaya Mining | Central Asia vs. Ferrexpo PLC |
| SilverCrest Metals vs. Gamma Communications PLC | SilverCrest Metals vs. MTI Wireless Edge | SilverCrest Metals vs. Zegona Communications Plc | SilverCrest Metals vs. Alaska Air Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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