Correlation Between Prime Mining and Aftermath Silver
Can any of the company-specific risk be diversified away by investing in both Prime Mining and Aftermath 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 Prime Mining and Aftermath Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Mining Corp and Aftermath Silver, you can compare the effects of market volatilities on Prime Mining and Aftermath 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 Prime Mining with a short position of Aftermath Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Mining and Aftermath Silver.
Diversification Opportunities for Prime Mining and Aftermath Silver
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prime and Aftermath is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Prime Mining Corp and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver and Prime 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 Prime Mining Corp are associated (or correlated) with Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of Prime Mining i.e., Prime Mining and Aftermath Silver go up and down completely randomly.
Pair Corralation between Prime Mining and Aftermath Silver
Assuming the 90 days horizon Prime Mining Corp is expected to under-perform the Aftermath Silver. In addition to that, Prime Mining is 1.45 times more volatile than Aftermath Silver. It trades about -0.12 of its total potential returns per unit of risk. Aftermath Silver is currently generating about -0.07 per unit of volatility. If you would invest 39.00 in Aftermath Silver on September 1, 2024 and sell it today you would lose (4.00) from holding Aftermath Silver or give up 10.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Mining Corp vs. Aftermath Silver
Performance |
| Timeline |
| Prime Mining Corp |
| Aftermath Silver |
Prime Mining and Aftermath Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Mining and Aftermath Silver
The main advantage of trading using opposite Prime Mining and Aftermath Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Mining position performs unexpectedly, Aftermath 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 Aftermath Silver will offset losses from the drop in Aftermath Silver's long position.| Prime Mining vs. Kenorland Minerals | Prime Mining vs. Canstar Resources | Prime Mining vs. Euro Manganese | Prime Mining vs. Chalice Mining Limited |
| Aftermath Silver vs. ATT Inc | Aftermath Silver vs. Merck Company | Aftermath Silver vs. Walt Disney | Aftermath Silver vs. Caterpillar |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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