Correlation Between Guanajuato Silver and New Age
Can any of the company-specific risk be diversified away by investing in both Guanajuato Silver and New Age 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 New Age into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guanajuato Silver and New Age Metals, you can compare the effects of market volatilities on Guanajuato Silver and New Age 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 New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guanajuato Silver and New Age.
Diversification Opportunities for Guanajuato Silver and New Age
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guanajuato and New is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals 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 New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and New Age go up and down completely randomly.
Pair Corralation between Guanajuato Silver and New Age
Assuming the 90 days horizon Guanajuato Silver is expected to generate 0.39 times more return on investment than New Age. However, Guanajuato Silver is 2.54 times less risky than New Age. It trades about -0.21 of its potential returns per unit of risk. New Age Metals is currently generating about -0.12 per unit of risk. If you would invest 18.00 in Guanajuato Silver on September 2, 2024 and sell it today you would lose (4.00) from holding Guanajuato Silver or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guanajuato Silver vs. New Age Metals
Performance |
| Timeline |
| Guanajuato Silver |
| New Age Metals |
Guanajuato Silver and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guanajuato Silver and New Age
The main advantage of trading using opposite Guanajuato Silver and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guanajuato Silver position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age's long position.| Guanajuato Silver vs. TVI Pacific | Guanajuato Silver vs. Industrias Penoles Sab | Guanajuato Silver vs. HUMANA INC | Guanajuato Silver vs. SCOR PK |
| New Age vs. Vision Lithium | New Age vs. Group Ten Metals | New Age vs. Generation Mining Limited | New Age vs. Nickel Creek Platinum |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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