Correlation Between Pan American and Fortuna Silver
Can any of the company-specific risk be diversified away by investing in both Pan American and Fortuna Silver 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 Pan American and Fortuna Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Fortuna Silver Mines, you can compare the effects of market volatilities on Pan American and Fortuna Silver 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 Pan American with a short position of Fortuna Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Fortuna Silver.
Diversification Opportunities for Pan American and Fortuna Silver
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pan and Fortuna is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Fortuna Silver Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortuna Silver Mines and Pan American 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 Pan American Silver are associated (or correlated) with Fortuna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortuna Silver Mines has no effect on the direction of Pan American i.e., Pan American and Fortuna Silver go up and down completely randomly.
Pair Corralation between Pan American and Fortuna Silver
Given the investment horizon of 90 days Pan American Silver is expected to under-perform the Fortuna Silver. In addition to that, Pan American is 1.09 times more volatile than Fortuna Silver Mines. It trades about -0.19 of its total potential returns per unit of risk. Fortuna Silver Mines is currently generating about -0.1 per unit of volatility. If you would invest 512.00 in Fortuna Silver Mines on August 28, 2024 and sell it today you would lose (30.00) from holding Fortuna Silver Mines or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan American Silver vs. Fortuna Silver Mines
Performance |
| Timeline |
| Pan American Silver |
| Fortuna Silver Mines |
Pan American and Fortuna Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Fortuna Silver
The main advantage of trading using opposite Pan American and Fortuna Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American position performs unexpectedly, Fortuna Silver 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 Fortuna Silver will offset losses from the drop in Fortuna Silver's long position.| Pan American vs. Newmont Goldcorp Corp | Pan American vs. Wheaton Precious Metals | Pan American vs. Franco Nevada | Pan American vs. Kinross Gold |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |