Correlation Between Defiance Silver and GCM Mining
Can any of the company-specific risk be diversified away by investing in both Defiance Silver and GCM Mining 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 GCM Mining 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 GCM Mining Corp, you can compare the effects of market volatilities on Defiance Silver and GCM Mining 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 GCM Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defiance Silver and GCM Mining.
Diversification Opportunities for Defiance Silver and GCM Mining
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Defiance and GCM is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Silver Corp and GCM Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Mining Corp 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 GCM Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Mining Corp has no effect on the direction of Defiance Silver i.e., Defiance Silver and GCM Mining go up and down completely randomly.
Pair Corralation between Defiance Silver and GCM Mining
Assuming the 90 days horizon Defiance Silver Corp is expected to generate 2.44 times more return on investment than GCM Mining. However, Defiance Silver is 2.44 times more volatile than GCM Mining Corp. It trades about 0.04 of its potential returns per unit of risk. GCM Mining Corp is currently generating about 0.02 per unit of risk. If you would invest 13.00 in Defiance Silver Corp on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Defiance Silver Corp or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 29.15% |
| Values | Daily Returns |
Defiance Silver Corp vs. GCM Mining Corp
Performance |
| Timeline |
| Defiance Silver Corp |
| GCM Mining Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Defiance Silver and GCM Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Defiance Silver and GCM Mining
The main advantage of trading using opposite Defiance Silver and GCM Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Defiance Silver position performs unexpectedly, GCM Mining 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 GCM Mining will offset losses from the drop in GCM Mining's 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 |
| GCM Mining vs. Silver Tiger Metals | GCM Mining vs. Defiance Silver Corp | GCM Mining vs. Summa Silver Corp | GCM Mining vs. AbraSilver Resource 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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