Correlation Between Kootenay Silver and Bear Creek
Can any of the company-specific risk be diversified away by investing in both Kootenay 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 Kootenay 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 Kootenay Silver and Bear Creek Mining, you can compare the effects of market volatilities on Kootenay 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 Kootenay Silver with a short position of Bear Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kootenay Silver and Bear Creek.
Diversification Opportunities for Kootenay Silver and Bear Creek
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kootenay and Bear is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kootenay 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 Kootenay 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 Kootenay 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 Kootenay Silver i.e., Kootenay Silver and Bear Creek go up and down completely randomly.
Pair Corralation between Kootenay Silver and Bear Creek
Assuming the 90 days horizon Kootenay Silver is expected to generate 0.5 times more return on investment than Bear Creek. However, Kootenay Silver is 2.0 times less risky than Bear Creek. It trades about -0.31 of its potential returns per unit of risk. Bear Creek Mining is currently generating about -0.18 per unit of risk. If you would invest 144.00 in Kootenay Silver on August 28, 2024 and sell it today you would lose (37.00) from holding Kootenay Silver or give up 25.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kootenay Silver vs. Bear Creek Mining
Performance |
| Timeline |
| Kootenay Silver |
| Bear Creek Mining |
Kootenay Silver and Bear Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kootenay Silver and Bear Creek
The main advantage of trading using opposite Kootenay Silver and Bear Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kootenay 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.The idea behind Kootenay Silver and Bear Creek Mining 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.| Bear Creek vs. IMPACT Silver Corp | Bear Creek vs. Golden Goliath Resources | Bear Creek vs. Minera Alamos | Bear Creek vs. Chesapeake Gold 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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