Correlation Between Defiance Silver and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Defiance Silver 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 Defiance Silver and SilverCrest Metals 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 SilverCrest Metals, you can compare the effects of market volatilities on Defiance Silver 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 Defiance Silver with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defiance Silver and SilverCrest Metals.
Diversification Opportunities for Defiance Silver and SilverCrest Metals
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Defiance and SilverCrest is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Silver Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 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 Defiance Silver i.e., Defiance Silver and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Defiance Silver and SilverCrest Metals
Assuming the 90 days horizon Defiance Silver Corp is expected to generate 2.09 times more return on investment than SilverCrest Metals. However, Defiance Silver is 2.09 times more volatile than SilverCrest Metals. It trades about 0.11 of its potential returns per unit of risk. SilverCrest Metals is currently generating about 0.14 per unit of risk. If you would invest 16.00 in Defiance Silver Corp on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Defiance Silver Corp or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Defiance Silver Corp vs. SilverCrest Metals
Performance |
| Timeline |
| Defiance Silver Corp |
| SilverCrest Metals |
Defiance Silver and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Defiance Silver and SilverCrest Metals
The main advantage of trading using opposite Defiance Silver and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Defiance Silver 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.| Defiance Silver vs. Aftermath Silver | Defiance Silver vs. AbraSilver Resource Corp | Defiance Silver vs. Southern Silver Exploration | Defiance Silver vs. Blackrock Silver Corp |
| SilverCrest Metals vs. Hecla Mining | SilverCrest Metals vs. McEwen Mining | SilverCrest Metals vs. Avino Silver Gold | SilverCrest Metals vs. Metalla Royalty Streaming |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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