Correlation Between Guanajuato Silver and Bear Creek
Can any of the company-specific risk be diversified away by investing in both Guanajuato Silver and Bear Creek 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 Guanajuato Silver and Bear Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guanajuato Silver and Bear Creek Mining, you can compare the effects of market volatilities on Guanajuato Silver and Bear Creek 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 Guanajuato Silver with a short position of Bear Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guanajuato Silver and Bear Creek.
Diversification Opportunities for Guanajuato Silver and Bear Creek
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guanajuato and Bear is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and Bear Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Creek Mining and Guanajuato 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 Guanajuato Silver are associated (or correlated) with Bear Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Creek Mining has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and Bear Creek go up and down completely randomly.
Pair Corralation between Guanajuato Silver and Bear Creek
Assuming the 90 days horizon Guanajuato Silver is expected to under-perform the Bear Creek. But the otc stock apears to be less risky and, when comparing its historical volatility, Guanajuato Silver is 1.21 times less risky than Bear Creek. The otc stock trades about -0.01 of its potential returns per unit of risk. The Bear Creek Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Bear Creek Mining on August 30, 2024 and sell it today you would lose (23.00) from holding Bear Creek Mining or give up 44.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Guanajuato Silver vs. Bear Creek Mining
Performance |
| Timeline |
| Guanajuato Silver |
| Bear Creek Mining |
Guanajuato Silver and Bear Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guanajuato Silver and Bear Creek
The main advantage of trading using opposite Guanajuato Silver and Bear Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guanajuato Silver position performs unexpectedly, Bear Creek 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 Bear Creek will offset losses from the drop in Bear Creek's long position.| Guanajuato Silver vs. Aya Gold Silver | Guanajuato Silver vs. Andean Precious Metals | Guanajuato Silver vs. Dolly Varden Silver | Guanajuato Silver vs. MAG Silver Corp |
| Bear Creek vs. Silver Hammer Mining | Bear Creek vs. Reyna Silver Corp | Bear Creek vs. Guanajuato Silver | Bear Creek vs. Silver One Resources |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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