Correlation Between Outcrop Gold and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Outcrop Gold 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 Outcrop Gold and SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outcrop Gold Corp and SilverCrest Metals, you can compare the effects of market volatilities on Outcrop Gold 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 Outcrop Gold with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outcrop Gold and SilverCrest Metals.
Diversification Opportunities for Outcrop Gold and SilverCrest Metals
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Outcrop and SilverCrest is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Outcrop Gold 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 Outcrop Gold Corp 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 Outcrop Gold i.e., Outcrop Gold and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Outcrop Gold and SilverCrest Metals
Assuming the 90 days horizon Outcrop Gold is expected to generate 1.67 times less return on investment than SilverCrest Metals. In addition to that, Outcrop Gold is 1.92 times more volatile than SilverCrest Metals. It trades about 0.02 of its total potential returns per unit of risk. SilverCrest Metals is currently generating about 0.05 per unit of volatility. If you would invest 818.00 in SilverCrest Metals on September 19, 2024 and sell it today you would earn a total of 617.00 from holding SilverCrest Metals or generate 75.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outcrop Gold Corp vs. SilverCrest Metals
Performance |
| Timeline |
| Outcrop Gold Corp |
| SilverCrest Metals |
Outcrop Gold and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outcrop Gold and SilverCrest Metals
The main advantage of trading using opposite Outcrop Gold and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outcrop Gold 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.| Outcrop Gold vs. Strikepoint Gold | Outcrop Gold vs. Defiance Silver Corp | Outcrop Gold vs. Eskay Mining Corp | Outcrop Gold vs. Stillwater Critical Minerals |
| SilverCrest Metals vs. Strikepoint Gold | SilverCrest Metals vs. Defiance Silver Corp | SilverCrest Metals vs. Eskay Mining Corp | SilverCrest Metals vs. Stillwater Critical Minerals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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