Correlation Between Gatos Silver and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Aya Gold 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 Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and Aya Gold Silver, you can compare the effects of market volatilities on Gatos Silver and Aya Gold 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 Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Aya Gold.
Diversification Opportunities for Gatos Silver and Aya Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gatos and Aya is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver 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 Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Gatos Silver i.e., Gatos Silver and Aya Gold go up and down completely randomly.
Pair Corralation between Gatos Silver and Aya Gold
Assuming the 90 days trading horizon Gatos Silver is expected to generate 0.53 times more return on investment than Aya Gold. However, Gatos Silver is 1.87 times less risky than Aya Gold. It trades about -0.24 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.21 per unit of risk. If you would invest 2,581 in Gatos Silver on September 1, 2024 and sell it today you would lose (404.00) from holding Gatos Silver or give up 15.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. Aya Gold Silver
Performance |
| Timeline |
| Gatos Silver |
| Aya Gold Silver |
Gatos Silver and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and Aya Gold
The main advantage of trading using opposite Gatos Silver and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| Gatos Silver vs. SilverCrest Metals | Gatos Silver vs. Reyna Silver Corp | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. GoGold Resources |
| Aya Gold vs. First Majestic Silver | Aya Gold vs. Ivanhoe Energy | Aya Gold vs. Orezone Gold Corp | Aya Gold vs. Faraday Copper Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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