Correlation Between Red Pine and Silver Hammer
Can any of the company-specific risk be diversified away by investing in both Red Pine and Silver Hammer 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 Red Pine and Silver Hammer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Pine Exploration and Silver Hammer Mining, you can compare the effects of market volatilities on Red Pine and Silver Hammer 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 Red Pine with a short position of Silver Hammer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Pine and Silver Hammer.
Diversification Opportunities for Red Pine and Silver Hammer
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Red and Silver is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Silver Hammer Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Hammer Mining and Red Pine 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 Red Pine Exploration are associated (or correlated) with Silver Hammer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Hammer Mining has no effect on the direction of Red Pine i.e., Red Pine and Silver Hammer go up and down completely randomly.
Pair Corralation between Red Pine and Silver Hammer
Assuming the 90 days horizon Red Pine is expected to generate 13.52 times less return on investment than Silver Hammer. But when comparing it to its historical volatility, Red Pine Exploration is 8.68 times less risky than Silver Hammer. It trades about 0.12 of its potential returns per unit of risk. Silver Hammer Mining is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3.98 in Silver Hammer Mining on November 27, 2024 and sell it today you would earn a total of 2.32 from holding Silver Hammer Mining or generate 58.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Red Pine Exploration vs. Silver Hammer Mining
Performance |
| Timeline |
| Red Pine Exploration |
| Silver Hammer Mining |
Red Pine and Silver Hammer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Pine and Silver Hammer
The main advantage of trading using opposite Red Pine and Silver Hammer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Pine position performs unexpectedly, Silver Hammer 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 Silver Hammer will offset losses from the drop in Silver Hammer's long position.| Red Pine vs. Endurance Gold | Red Pine vs. Altamira Gold Corp | Red Pine vs. Grande Portage Resources | Red Pine vs. Tectonic Metals |
| Silver Hammer vs. Arizona Silver Exploration | Silver Hammer vs. Dolly Varden Silver | Silver Hammer vs. Reyna Silver Corp | Silver Hammer vs. Guanajuato Silver |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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