Correlation Between Gatos Silver and Opus One
Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Opus One 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 Opus One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and Opus One Resources, you can compare the effects of market volatilities on Gatos Silver and Opus One 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 Opus One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Opus One.
Diversification Opportunities for Gatos Silver and Opus One
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gatos and Opus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Opus One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opus One Resources 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 Opus One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opus One Resources has no effect on the direction of Gatos Silver i.e., Gatos Silver and Opus One go up and down completely randomly.
Pair Corralation between Gatos Silver and Opus One
Assuming the 90 days trading horizon Gatos Silver is expected to generate 1.47 times less return on investment than Opus One. But when comparing it to its historical volatility, Gatos Silver is 2.03 times less risky than Opus One. It trades about 0.05 of its potential returns per unit of risk. Opus One Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Opus One Resources on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Opus One Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Gatos Silver vs. Opus One Resources
Performance |
| Timeline |
| Gatos Silver |
| Opus One Resources |
Gatos Silver and Opus One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and Opus One
The main advantage of trading using opposite Gatos Silver and Opus One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver position performs unexpectedly, Opus One 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 Opus One will offset losses from the drop in Opus One'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 |
| Opus One vs. First Majestic Silver | Opus One vs. Ivanhoe Energy | Opus One vs. Orezone Gold Corp | Opus One 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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