Correlation Between Gatos Silver and Arizona Metals
Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Arizona Metals 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 Gatos Silver and Arizona Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and Arizona Metals Corp, you can compare the effects of market volatilities on Gatos Silver and Arizona Metals 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 Gatos Silver with a short position of Arizona Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Arizona Metals.
Diversification Opportunities for Gatos Silver and Arizona Metals
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gatos and Arizona is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Arizona Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Metals Corp and Gatos 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 Gatos Silver are associated (or correlated) with Arizona Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Metals Corp has no effect on the direction of Gatos Silver i.e., Gatos Silver and Arizona Metals go up and down completely randomly.
Pair Corralation between Gatos Silver and Arizona Metals
Assuming the 90 days trading horizon Gatos Silver is expected to generate 0.96 times more return on investment than Arizona Metals. However, Gatos Silver is 1.04 times less risky than Arizona Metals. It trades about 0.13 of its potential returns per unit of risk. Arizona Metals Corp is currently generating about 0.0 per unit of risk. If you would invest 677.00 in Gatos Silver on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Gatos Silver or generate 221.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. Arizona Metals Corp
Performance |
| Timeline |
| Gatos Silver |
| Arizona Metals Corp |
Gatos Silver and Arizona Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and Arizona Metals
The main advantage of trading using opposite Gatos Silver and Arizona Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver position performs unexpectedly, Arizona Metals 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 Arizona Metals will offset losses from the drop in Arizona Metals' long position.| Gatos Silver vs. SilverCrest Metals | Gatos Silver vs. Reyna Silver Corp | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. GoGold Resources |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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