Correlation Between Eskay Mining and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Eskay Mining 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 Eskay Mining and SilverCrest Metals 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 SilverCrest Metals, you can compare the effects of market volatilities on Eskay Mining 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 Eskay Mining with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and SilverCrest Metals.
Diversification Opportunities for Eskay Mining and SilverCrest Metals
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eskay and SilverCrest is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 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 Eskay Mining i.e., Eskay Mining and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Eskay Mining and SilverCrest Metals
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the SilverCrest Metals. In addition to that, Eskay Mining is 1.77 times more volatile than SilverCrest Metals. It trades about -0.04 of its total potential returns per unit of risk. SilverCrest Metals is currently generating about 0.05 per unit of volatility. If you would invest 810.00 in SilverCrest Metals on September 20, 2024 and sell it today you would earn a total of 533.00 from holding SilverCrest Metals or generate 65.8% 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. SilverCrest Metals
Performance |
| Timeline |
| Eskay Mining Corp |
| SilverCrest Metals |
Eskay Mining and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and SilverCrest Metals
The main advantage of trading using opposite Eskay Mining and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay Mining 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.| Eskay Mining vs. Foraco International SA | Eskay Mining vs. Geodrill Limited | Eskay Mining vs. Bri Chem Corp |
| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox Gold 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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