Correlation Between Eskay Mining and AbraSilver Resource
Can any of the company-specific risk be diversified away by investing in both Eskay Mining and AbraSilver Resource 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 Eskay Mining and AbraSilver Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eskay Mining Corp and AbraSilver Resource Corp, you can compare the effects of market volatilities on Eskay Mining and AbraSilver Resource 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 Eskay Mining with a short position of AbraSilver Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and AbraSilver Resource.
Diversification Opportunities for Eskay Mining and AbraSilver Resource
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eskay and AbraSilver is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp and Eskay Mining 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 Eskay Mining Corp are associated (or correlated) with AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of Eskay Mining i.e., Eskay Mining and AbraSilver Resource go up and down completely randomly.
Pair Corralation between Eskay Mining and AbraSilver Resource
Assuming the 90 days horizon Eskay Mining Corp is expected to generate 2.48 times more return on investment than AbraSilver Resource. However, Eskay Mining is 2.48 times more volatile than AbraSilver Resource Corp. It trades about 0.14 of its potential returns per unit of risk. AbraSilver Resource Corp is currently generating about -0.02 per unit of risk. If you would invest 16.00 in Eskay Mining Corp on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Eskay Mining Corp or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. AbraSilver Resource Corp
Performance |
| Timeline |
| Eskay Mining Corp |
| AbraSilver Resource Corp |
Eskay Mining and AbraSilver Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and AbraSilver Resource
The main advantage of trading using opposite Eskay Mining and AbraSilver Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining position performs unexpectedly, AbraSilver Resource 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 AbraSilver Resource will offset losses from the drop in AbraSilver Resource's long position.| Eskay Mining vs. Grande Portage Resources | Eskay Mining vs. Strikepoint Gold | Eskay Mining vs. Blackrock Silver Corp | Eskay Mining vs. American Creek Resources |
| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. Santacruz Silv | AbraSilver Resource vs. Guanajuato Silver | AbraSilver Resource vs. Aftermath 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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