Correlation Between Excellon Resources and Fortuna Silver
Can any of the company-specific risk be diversified away by investing in both Excellon Resources and Fortuna 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 Excellon Resources and Fortuna Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellon Resources and Fortuna Silver Mines, you can compare the effects of market volatilities on Excellon Resources and Fortuna 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 Excellon Resources with a short position of Fortuna Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellon Resources and Fortuna Silver.
Diversification Opportunities for Excellon Resources and Fortuna Silver
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Excellon and Fortuna is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Excellon Resources and Fortuna Silver Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortuna Silver Mines and Excellon 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 Excellon Resources are associated (or correlated) with Fortuna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortuna Silver Mines has no effect on the direction of Excellon Resources i.e., Excellon Resources and Fortuna Silver go up and down completely randomly.
Pair Corralation between Excellon Resources and Fortuna Silver
Assuming the 90 days trading horizon Excellon Resources is expected to generate 2.52 times more return on investment than Fortuna Silver. However, Excellon Resources is 2.52 times more volatile than Fortuna Silver Mines. It trades about 0.27 of its potential returns per unit of risk. Fortuna Silver Mines is currently generating about 0.05 per unit of risk. If you would invest 10.00 in Excellon Resources on November 27, 2024 and sell it today you would earn a total of 6.00 from holding Excellon Resources or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excellon Resources vs. Fortuna Silver Mines
Performance |
| Timeline |
| Excellon Resources |
| Fortuna Silver Mines |
Excellon Resources and Fortuna Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excellon Resources and Fortuna Silver
The main advantage of trading using opposite Excellon Resources and Fortuna Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellon Resources position performs unexpectedly, Fortuna 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 Fortuna Silver will offset losses from the drop in Fortuna Silver's long position.| Excellon Resources vs. Minco Silver | Excellon Resources vs. Americas Silver Corp | Excellon Resources vs. IMPACT Silver Corp | Excellon Resources vs. Dolly Varden Silver |
| Fortuna Silver vs. Endeavour Silver Corp | Fortuna Silver vs. Silvercorp Metals | Fortuna Silver vs. MAG Silver Corp | Fortuna Silver vs. Pan American 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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