Correlation Between Entree Resources and Americas Silver
Can any of the company-specific risk be diversified away by investing in both Entree Resources and Americas Silver 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 Entree Resources and Americas Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entree Resources and Americas Silver Corp, you can compare the effects of market volatilities on Entree Resources and Americas Silver 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 Entree Resources with a short position of Americas Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entree Resources and Americas Silver.
Diversification Opportunities for Entree Resources and Americas Silver
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Entree and Americas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Entree Resources and Americas Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Silver Corp and Entree Resources 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 Entree Resources are associated (or correlated) with Americas Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Silver Corp has no effect on the direction of Entree Resources i.e., Entree Resources and Americas Silver go up and down completely randomly.
Pair Corralation between Entree Resources and Americas Silver
Assuming the 90 days trading horizon Entree Resources is expected to generate 0.75 times more return on investment than Americas Silver. However, Entree Resources is 1.32 times less risky than Americas Silver. It trades about 0.0 of its potential returns per unit of risk. Americas Silver Corp is currently generating about -0.13 per unit of risk. If you would invest 199.00 in Entree Resources on August 29, 2024 and sell it today you would lose (4.00) from holding Entree Resources or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entree Resources vs. Americas Silver Corp
Performance |
| Timeline |
| Entree Resources |
| Americas Silver Corp |
Entree Resources and Americas Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entree Resources and Americas Silver
The main advantage of trading using opposite Entree Resources and Americas Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entree Resources position performs unexpectedly, Americas Silver 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 Americas Silver will offset losses from the drop in Americas Silver's long position.| Entree Resources vs. First Majestic Silver | Entree Resources vs. Ivanhoe Energy | Entree Resources vs. Orezone Gold Corp | Entree Resources vs. Faraday Copper Corp |
| Americas Silver vs. Excellon Resources | Americas Silver vs. GoGold Resources | Americas Silver vs. Fortuna Silver Mines | Americas Silver 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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