Correlation Between Red Pine and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both Red Pine and Gatos 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 Red Pine and Gatos Silver 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 Gatos Silver, you can compare the effects of market volatilities on Red Pine and Gatos 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 Red Pine with a short position of Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Pine and Gatos Silver.
Diversification Opportunities for Red Pine and Gatos Silver
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Red and Gatos is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Red Pine i.e., Red Pine and Gatos Silver go up and down completely randomly.
Pair Corralation between Red Pine and Gatos Silver
Assuming the 90 days horizon Red Pine Exploration is expected to under-perform the Gatos Silver. But the stock apears to be less risky and, when comparing its historical volatility, Red Pine Exploration is 1.02 times less risky than Gatos Silver. The stock trades about -0.07 of its potential returns per unit of risk. The Gatos Silver is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,303 in Gatos Silver on September 13, 2024 and sell it today you would earn a total of 91.00 from holding Gatos Silver or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Pine Exploration vs. Gatos Silver
Performance |
| Timeline |
| Red Pine Exploration |
| Gatos Silver |
Red Pine and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Pine and Gatos Silver
The main advantage of trading using opposite Red Pine and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Pine position performs unexpectedly, Gatos 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.| Red Pine vs. Honey Badger Silver | Red Pine vs. Inventus Mining Corp | Red Pine vs. CANEX Metals | Red Pine vs. Ressources Minieres Radisson |
| Gatos Silver vs. Outcrop Gold Corp | Gatos Silver vs. Strikepoint Gold | Gatos Silver vs. Defiance Silver Corp | Gatos Silver vs. Eskay Mining 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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