Correlation Between Gatos Silver and Triple Flag
Can any of the company-specific risk be diversified away by investing in both Gatos Silver and Triple Flag 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 Triple Flag into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gatos Silver and Triple Flag Precious, you can compare the effects of market volatilities on Gatos Silver and Triple Flag 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 Triple Flag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gatos Silver and Triple Flag.
Diversification Opportunities for Gatos Silver and Triple Flag
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gatos and Triple is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Triple Flag Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triple Flag Precious 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 Triple Flag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triple Flag Precious has no effect on the direction of Gatos Silver i.e., Gatos Silver and Triple Flag go up and down completely randomly.
Pair Corralation between Gatos Silver and Triple Flag
Assuming the 90 days trading horizon Gatos Silver is expected to under-perform the Triple Flag. In addition to that, Gatos Silver is 2.28 times more volatile than Triple Flag Precious. It trades about -0.09 of its total potential returns per unit of risk. Triple Flag Precious is currently generating about -0.19 per unit of volatility. If you would invest 2,347 in Triple Flag Precious on October 10, 2024 and sell it today you would lose (137.00) from holding Triple Flag Precious or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gatos Silver vs. Triple Flag Precious
Performance |
| Timeline |
| Gatos Silver |
| Triple Flag Precious |
Gatos Silver and Triple Flag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gatos Silver and Triple Flag
The main advantage of trading using opposite Gatos Silver and Triple Flag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gatos Silver position performs unexpectedly, Triple Flag 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 Triple Flag will offset losses from the drop in Triple Flag'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 |
| Triple Flag vs. Enduro Metals Corp | Triple Flag vs. US Financial 15 | Triple Flag vs. Financial 15 Split | Triple Flag vs. Rogers Communications |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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