Correlation Between Gatos Silver and Plato Gold
Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Plato 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 Plato 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 Plato Gold Corp, you can compare the effects of market volatilities on Gatos Silver and Plato 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 Plato Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Plato Gold.
Diversification Opportunities for Gatos Silver and Plato Gold
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gatos and Plato is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Plato Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plato Gold 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 Plato Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plato Gold Corp has no effect on the direction of Gatos Silver i.e., Gatos Silver and Plato Gold go up and down completely randomly.
Pair Corralation between Gatos Silver and Plato Gold
Assuming the 90 days trading horizon Gatos Silver is expected to under-perform the Plato Gold. But the stock apears to be less risky and, when comparing its historical volatility, Gatos Silver is 5.56 times less risky than Plato Gold. The stock trades about -0.23 of its potential returns per unit of risk. The Plato Gold Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Plato Gold Corp on August 28, 2024 and sell it today you would lose (0.50) from holding Plato Gold Corp or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. Plato Gold Corp
Performance |
| Timeline |
| Gatos Silver |
| Plato Gold Corp |
Gatos Silver and Plato Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and Plato Gold
The main advantage of trading using opposite Gatos Silver and Plato Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver position performs unexpectedly, Plato 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 Plato Gold will offset losses from the drop in Plato Gold's long position.| Gatos Silver vs. First Majestic Silver | Gatos Silver vs. Ivanhoe Energy | Gatos Silver vs. Orezone Gold Corp | Gatos Silver vs. Faraday Copper Corp |
| Plato Gold vs. Q Gold Resources | Plato Gold vs. MAS Gold Corp | Plato Gold vs. ExGen Resources | Plato Gold vs. Carlin Gold |
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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