Correlation Between Silver Hammer and Silver Mines
Can any of the company-specific risk be diversified away by investing in both Silver Hammer and Silver Mines 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 Silver Hammer and Silver Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Hammer Mining and Silver Mines Limited, you can compare the effects of market volatilities on Silver Hammer and Silver Mines 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 Silver Hammer with a short position of Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Hammer and Silver Mines.
Diversification Opportunities for Silver Hammer and Silver Mines
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Silver and Silver is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Silver Hammer Mining and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited and Silver Hammer 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 Silver Hammer Mining are associated (or correlated) with Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Silver Hammer i.e., Silver Hammer and Silver Mines go up and down completely randomly.
Pair Corralation between Silver Hammer and Silver Mines
Assuming the 90 days horizon Silver Hammer is expected to generate 4.74 times less return on investment than Silver Mines. But when comparing it to its historical volatility, Silver Hammer Mining is 1.17 times less risky than Silver Mines. It trades about 0.05 of its potential returns per unit of risk. Silver Mines Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Silver Mines Limited on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Silver Mines Limited or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Silver Hammer Mining vs. Silver Mines Limited
Performance |
| Timeline |
| Silver Hammer Mining |
| Silver Mines Limited |
Silver Hammer and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Hammer and Silver Mines
The main advantage of trading using opposite Silver Hammer and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Hammer position performs unexpectedly, Silver Mines 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 Silver Mines will offset losses from the drop in Silver Mines' long position.| Silver Hammer vs. Arizona Silver Exploration | Silver Hammer vs. Dolly Varden Silver | Silver Hammer vs. Reyna Silver Corp | Silver Hammer vs. Guanajuato Silver |
| Silver Mines vs. Arizona Silver Exploration | Silver Mines vs. Silver Hammer Mining | Silver Mines vs. Dolly Varden Silver | Silver Mines vs. Reyna Silver Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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