Correlation Between Defiance Silver and Maple Gold
Can any of the company-specific risk be diversified away by investing in both Defiance Silver and Maple Gold 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 Defiance Silver and Maple Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Defiance Silver Corp and Maple Gold Mines, you can compare the effects of market volatilities on Defiance Silver and Maple Gold 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 Defiance Silver with a short position of Maple Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defiance Silver and Maple Gold.
Diversification Opportunities for Defiance Silver and Maple Gold
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Defiance and Maple is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Silver Corp and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines and Defiance 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 Defiance Silver Corp are associated (or correlated) with Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of Defiance Silver i.e., Defiance Silver and Maple Gold go up and down completely randomly.
Pair Corralation between Defiance Silver and Maple Gold
Assuming the 90 days horizon Defiance Silver Corp is expected to generate 1.09 times more return on investment than Maple Gold. However, Defiance Silver is 1.09 times more volatile than Maple Gold Mines. It trades about 0.04 of its potential returns per unit of risk. Maple Gold Mines is currently generating about 0.0 per unit of risk. If you would invest 17.00 in Defiance Silver Corp on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Defiance Silver Corp or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Defiance Silver Corp vs. Maple Gold Mines
Performance |
| Timeline |
| Defiance Silver Corp |
| Maple Gold Mines |
Defiance Silver and Maple Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Defiance Silver and Maple Gold
The main advantage of trading using opposite Defiance Silver and Maple Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Defiance Silver position performs unexpectedly, Maple Gold 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 Maple Gold will offset losses from the drop in Maple Gold's long position.| Defiance Silver vs. First Majestic Silver | Defiance Silver vs. Ivanhoe Energy | Defiance Silver vs. Orezone Gold Corp | Defiance Silver vs. Faraday Copper Corp |
| Maple Gold vs. Liberty Gold Corp | Maple Gold vs. Cartier Resources | Maple Gold vs. Banyan Gold Corp | Maple Gold vs. Maritime Resources 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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