Correlation Between Ferroglobe PLC and Americas Silver

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Can any of the company-specific risk be diversified away by investing in both Ferroglobe PLC and Americas Silver 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 Ferroglobe PLC and Americas Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferroglobe PLC and Americas Silver Corp, you can compare the effects of market volatilities on Ferroglobe PLC and Americas Silver 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 Ferroglobe PLC with a short position of Americas Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferroglobe PLC and Americas Silver.

Diversification Opportunities for Ferroglobe PLC and Americas Silver

FerroglobeAmericasDiversified AwayFerroglobeAmericasDiversified Away100%
-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ferroglobe and Americas is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ferroglobe PLC and Americas Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Silver Corp and Ferroglobe PLC 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 Ferroglobe PLC are associated (or correlated) with Americas Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Silver Corp has no effect on the direction of Ferroglobe PLC i.e., Ferroglobe PLC and Americas Silver go up and down completely randomly.

Pair Corralation between Ferroglobe PLC and Americas Silver

Considering the 90-day investment horizon Ferroglobe PLC is expected to under-perform the Americas Silver. But the stock apears to be less risky and, when comparing its historical volatility, Ferroglobe PLC is 1.95 times less risky than Americas Silver. The stock trades about -0.01 of its potential returns per unit of risk. The Americas Silver Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Americas Silver Corp on November 26, 2024 and sell it today you would earn a total of  2.70  from holding Americas Silver Corp or generate 5.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ferroglobe PLC  vs.  Americas Silver Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030405060
JavaScript chart by amCharts 3.21.15GSM USAS
       Timeline  
Ferroglobe PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ferroglobe PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.63.844.24.44.6
Americas Silver Corp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Americas Silver Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Americas Silver unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.350.40.450.50.550.6

Ferroglobe PLC and Americas Silver Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.62-2.71-1.8-0.890.00.821.652.493.32 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15GSM USAS
       Returns  

Pair Trading with Ferroglobe PLC and Americas Silver

The main advantage of trading using opposite Ferroglobe PLC and Americas Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferroglobe PLC position performs unexpectedly, Americas Silver 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 Americas Silver will offset losses from the drop in Americas Silver's long position.
The idea behind Ferroglobe PLC and Americas Silver Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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