Correlation Between Fortuna Silver and K92 Mining
Can any of the company-specific risk be diversified away by investing in both Fortuna Silver and K92 Mining 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 Fortuna Silver and K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortuna Silver Mines and K92 Mining, you can compare the effects of market volatilities on Fortuna Silver and K92 Mining 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 Fortuna Silver with a short position of K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortuna Silver and K92 Mining.
Diversification Opportunities for Fortuna Silver and K92 Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortuna and K92 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining and Fortuna Silver 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 Fortuna Silver Mines are associated (or correlated) with K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and K92 Mining go up and down completely randomly.
Pair Corralation between Fortuna Silver and K92 Mining
Considering the 90-day investment horizon Fortuna Silver is expected to generate 1.17 times less return on investment than K92 Mining. But when comparing it to its historical volatility, Fortuna Silver Mines is 1.04 times less risky than K92 Mining. It trades about 0.04 of its potential returns per unit of risk. K92 Mining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 445.00 in K92 Mining on August 31, 2024 and sell it today you would earn a total of 198.00 from holding K92 Mining or generate 44.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortuna Silver Mines vs. K92 Mining
Performance |
| Timeline |
| Fortuna Silver Mines |
| K92 Mining |
Fortuna Silver and K92 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortuna Silver and K92 Mining
The main advantage of trading using opposite Fortuna Silver and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortuna Silver position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining's long position.| Fortuna Silver vs. Pan American Silver | Fortuna Silver vs. Harmony Gold Mining | Fortuna Silver vs. IAMGold | Fortuna Silver vs. Kinross Gold |
| K92 Mining vs. I 80 Gold Corp | K92 Mining vs. Equinox Gold Corp | K92 Mining vs. Contango ORE | K92 Mining vs. Orla Mining |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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