Correlation Between Dolly Varden and Excellon Resources
Can any of the company-specific risk be diversified away by investing in both Dolly Varden and Excellon Resources 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 Dolly Varden and Excellon Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolly Varden Silver and Excellon Resources, you can compare the effects of market volatilities on Dolly Varden and Excellon Resources 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 Dolly Varden with a short position of Excellon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolly Varden and Excellon Resources.
Diversification Opportunities for Dolly Varden and Excellon Resources
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dolly and Excellon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dolly Varden Silver and Excellon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellon Resources and Dolly Varden 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 Dolly Varden Silver are associated (or correlated) with Excellon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellon Resources has no effect on the direction of Dolly Varden i.e., Dolly Varden and Excellon Resources go up and down completely randomly.
Pair Corralation between Dolly Varden and Excellon Resources
Given the investment horizon of 90 days Dolly Varden is expected to generate 1.65 times less return on investment than Excellon Resources. But when comparing it to its historical volatility, Dolly Varden Silver is 2.1 times less risky than Excellon Resources. It trades about 0.16 of its potential returns per unit of risk. Excellon Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Excellon Resources on October 23, 2024 and sell it today you would earn a total of 1.00 from holding Excellon Resources or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolly Varden Silver vs. Excellon Resources
Performance |
| Timeline |
| Dolly Varden Silver |
| Excellon Resources |
Dolly Varden and Excellon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolly Varden and Excellon Resources
The main advantage of trading using opposite Dolly Varden and Excellon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolly Varden position performs unexpectedly, Excellon Resources 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 Excellon Resources will offset losses from the drop in Excellon Resources' long position.| Dolly Varden vs. Defiance Silver Corp | Dolly Varden vs. Metallic Minerals Corp | Dolly Varden vs. Kootenay Silver | Dolly Varden vs. Minaurum Gold |
| Excellon Resources vs. Minco Silver | Excellon Resources vs. Americas Silver Corp | Excellon Resources vs. IMPACT Silver Corp | Excellon Resources vs. Dolly Varden Silver |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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