Correlation Between Noranda Aluminum and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Noranda Aluminum 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 Noranda Aluminum and SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noranda Aluminum Holding and SilverCrest Metals, you can compare the effects of market volatilities on Noranda Aluminum 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 Noranda Aluminum with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noranda Aluminum and SilverCrest Metals.
Diversification Opportunities for Noranda Aluminum and SilverCrest Metals
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Noranda and SilverCrest is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Noranda Aluminum Holding and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Noranda Aluminum 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 Noranda Aluminum Holding 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 Noranda Aluminum i.e., Noranda Aluminum and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Noranda Aluminum and SilverCrest Metals
If you would invest (100.00) in Noranda Aluminum Holding on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Noranda Aluminum Holding or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Noranda Aluminum Holding vs. SilverCrest Metals
Performance |
| Timeline |
| Noranda Aluminum Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SilverCrest Metals |
Noranda Aluminum and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noranda Aluminum and SilverCrest Metals
The main advantage of trading using opposite Noranda Aluminum and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noranda Aluminum 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.| Noranda Aluminum vs. ServiceNow | Noranda Aluminum vs. Evertz Technologies Limited | Noranda Aluminum vs. Nextplat Corp | Noranda Aluminum vs. SmartStop Self Storage |
| SilverCrest Metals vs. Endeavour Silver Corp | SilverCrest Metals vs. Fortuna Silver Mines | SilverCrest Metals vs. New Gold | SilverCrest Metals vs. Sandstorm Gold Ltd |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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