Correlation Between Fortuna Silver and Americas Silver
Can any of the company-specific risk be diversified away by investing in both Fortuna Silver 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 Fortuna Silver and Americas Silver 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 Americas Silver Corp, you can compare the effects of market volatilities on Fortuna Silver 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 Fortuna Silver with a short position of Americas Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortuna Silver and Americas Silver.
Diversification Opportunities for Fortuna Silver and Americas Silver
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortuna and Americas is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines 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 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 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 Fortuna Silver i.e., Fortuna Silver and Americas Silver go up and down completely randomly.
Pair Corralation between Fortuna Silver and Americas Silver
Assuming the 90 days trading horizon Fortuna Silver Mines is expected to generate 0.65 times more return on investment than Americas Silver. However, Fortuna Silver Mines is 1.54 times less risky than Americas Silver. It trades about 0.05 of its potential returns per unit of risk. Americas Silver Corp is currently generating about 0.03 per unit of risk. If you would invest 472.00 in Fortuna Silver Mines on August 31, 2024 and sell it today you would earn a total of 203.00 from holding Fortuna Silver Mines or generate 43.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Fortuna Silver Mines vs. Americas Silver Corp
Performance |
| Timeline |
| Fortuna Silver Mines |
| Americas Silver Corp |
Fortuna Silver and Americas Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortuna Silver and Americas Silver
The main advantage of trading using opposite Fortuna Silver and Americas Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortuna Silver 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.| Fortuna Silver vs. Endeavour Silver Corp | Fortuna Silver vs. Silvercorp Metals | Fortuna Silver vs. MAG Silver Corp | Fortuna Silver vs. Pan American Silver |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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