Correlation Between New Age and Silver Elephant
Can any of the company-specific risk be diversified away by investing in both New Age and Silver Elephant 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 New Age and Silver Elephant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Age Metals and Silver Elephant Mining, you can compare the effects of market volatilities on New Age and Silver Elephant 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 New Age with a short position of Silver Elephant. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Age and Silver Elephant.
Diversification Opportunities for New Age and Silver Elephant
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Silver is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding New Age Metals and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining and New Age 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 New Age Metals are associated (or correlated) with Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of New Age i.e., New Age and Silver Elephant go up and down completely randomly.
Pair Corralation between New Age and Silver Elephant
Assuming the 90 days horizon New Age Metals is expected to generate 3.84 times more return on investment than Silver Elephant. However, New Age is 3.84 times more volatile than Silver Elephant Mining. It trades about 0.12 of its potential returns per unit of risk. Silver Elephant Mining is currently generating about -0.04 per unit of risk. If you would invest 2.54 in New Age Metals on October 26, 2024 and sell it today you would earn a total of 3.03 from holding New Age Metals or generate 119.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
New Age Metals vs. Silver Elephant Mining
Performance |
| Timeline |
| New Age Metals |
| Silver Elephant Mining |
New Age and Silver Elephant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Age and Silver Elephant
The main advantage of trading using opposite New Age and Silver Elephant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Age position performs unexpectedly, Silver Elephant 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 Elephant will offset losses from the drop in Silver Elephant's long position.| New Age vs. Vision Lithium | New Age vs. Group Ten Metals | New Age vs. Generation Mining Limited | New Age vs. Nickel Creek Platinum |
| Silver Elephant vs. Commerce Resources Corp | Silver Elephant vs. Great Western Minerals | Silver Elephant vs. StrikePoint Gold | Silver Elephant vs. Eskay Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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