Correlation Between Fortuna Silver and New World
Can any of the company-specific risk be diversified away by investing in both Fortuna Silver and New World 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 New World 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 New World Gold, you can compare the effects of market volatilities on Fortuna Silver and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortuna Silver and New World.
Diversification Opportunities for Fortuna Silver and New World
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortuna and New is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and New World Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Gold 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Gold has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and New World go up and down completely randomly.
Pair Corralation between Fortuna Silver and New World
Considering the 90-day investment horizon Fortuna Silver is expected to generate 119.96 times less return on investment than New World. But when comparing it to its historical volatility, Fortuna Silver Mines is 33.75 times less risky than New World. It trades about 0.04 of its potential returns per unit of risk. New World Gold is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.01 in New World Gold on August 29, 2024 and sell it today you would earn a total of 0.00 from holding New World Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fortuna Silver Mines vs. New World Gold
Performance |
| Timeline |
| Fortuna Silver Mines |
| New World Gold |
Fortuna Silver and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortuna Silver and New World
The main advantage of trading using opposite Fortuna Silver and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortuna Silver position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Fortuna Silver vs. Pan American Silver | Fortuna Silver vs. Harmony Gold Mining | Fortuna Silver vs. IAMGold | Fortuna Silver vs. Kinross Gold |
| New World vs. Gncc Capital | New World vs. American International Ventures | New World vs. Rackla Metals | New World vs. Allegiant Gold |
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 CEOs Directory module to screen CEOs from public companies around the world.
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