Correlation Between Orla Mining and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Orla Mining 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 Orla Mining and SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orla Mining and SilverCrest Metals, you can compare the effects of market volatilities on Orla Mining 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 Orla Mining with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orla Mining and SilverCrest Metals.
Diversification Opportunities for Orla Mining and SilverCrest Metals
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orla and SilverCrest is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Orla Mining and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Orla Mining 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 Orla Mining 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 Orla Mining i.e., Orla Mining and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Orla Mining and SilverCrest Metals
Assuming the 90 days trading horizon Orla Mining is expected to under-perform the SilverCrest Metals. In addition to that, Orla Mining is 1.01 times more volatile than SilverCrest Metals. It trades about -0.08 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 1,484 in SilverCrest Metals on August 29, 2024 and sell it today you would lose (79.00) from holding SilverCrest Metals or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orla Mining vs. SilverCrest Metals
Performance |
| Timeline |
| Orla Mining |
| SilverCrest Metals |
Orla Mining and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orla Mining and SilverCrest Metals
The main advantage of trading using opposite Orla Mining and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orla Mining 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.The idea behind Orla Mining and SilverCrest Metals 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.| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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