Correlation Between Metalla Royalty and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Metalla Royalty and SilverCrest Metals 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 Metalla Royalty and SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalla Royalty Streaming and SilverCrest Metals, you can compare the effects of market volatilities on Metalla Royalty and SilverCrest Metals 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 Metalla Royalty with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalla Royalty and SilverCrest Metals.
Diversification Opportunities for Metalla Royalty and SilverCrest Metals
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metalla and SilverCrest is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Metalla Royalty Streaming and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Metalla Royalty 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 Metalla Royalty Streaming are associated (or correlated) with SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Metalla Royalty i.e., Metalla Royalty and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Metalla Royalty and SilverCrest Metals
Considering the 90-day investment horizon Metalla Royalty Streaming is expected to under-perform the SilverCrest Metals. But the stock apears to be less risky and, when comparing its historical volatility, Metalla Royalty Streaming is 1.07 times less risky than SilverCrest Metals. The stock trades about -0.25 of its potential returns per unit of risk. The SilverCrest Metals is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,066 in SilverCrest Metals on August 27, 2024 and sell it today you would lose (76.00) from holding SilverCrest Metals or give up 7.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalla Royalty Streaming vs. SilverCrest Metals
Performance |
| Timeline |
| Metalla Royalty Streaming |
| SilverCrest Metals |
Metalla Royalty and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalla Royalty and SilverCrest Metals
The main advantage of trading using opposite Metalla Royalty and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalla Royalty position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| Metalla Royalty vs. Triple Flag Precious | Metalla Royalty vs. Endeavour Silver Corp | Metalla Royalty vs. SilverCrest Metals | Metalla Royalty vs. Gatos Silver |
| SilverCrest Metals vs. Hecla Mining | SilverCrest Metals vs. McEwen Mining | SilverCrest Metals vs. Endeavour Silver Corp | SilverCrest Metals vs. New Pacific Metals |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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