Correlation Between Fortuna Silver and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Fortuna Silver and Platinum Group 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 Platinum Group 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 Platinum Group Metals, you can compare the effects of market volatilities on Fortuna Silver and Platinum Group 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 Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortuna Silver and Platinum Group.
Diversification Opportunities for Fortuna Silver and Platinum Group
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortuna and Platinum is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Platinum Group go up and down completely randomly.
Pair Corralation between Fortuna Silver and Platinum Group
Considering the 90-day investment horizon Fortuna Silver Mines is expected to generate 0.51 times more return on investment than Platinum Group. However, Fortuna Silver Mines is 1.98 times less risky than Platinum Group. It trades about -0.09 of its potential returns per unit of risk. Platinum Group Metals is currently generating about -0.19 per unit of risk. If you would invest 512.00 in Fortuna Silver Mines on August 29, 2024 and sell it today you would lose (28.00) from holding Fortuna Silver Mines or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortuna Silver Mines vs. Platinum Group Metals
Performance |
| Timeline |
| Fortuna Silver Mines |
| Platinum Group Metals |
Fortuna Silver and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortuna Silver and Platinum Group
The main advantage of trading using opposite Fortuna Silver and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortuna Silver position performs unexpectedly, Platinum Group 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 Platinum Group will offset losses from the drop in Platinum Group's long position.| Fortuna Silver vs. Pan American Silver | Fortuna Silver vs. Harmony Gold Mining | Fortuna Silver vs. IAMGold | Fortuna Silver vs. Kinross Gold |
| Platinum Group vs. Endeavour Silver Corp | Platinum Group vs. Avino Silver Gold | Platinum Group vs. Fortuna Silver Mines | Platinum Group vs. Impala Platinum Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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