Correlation Between SilverCrest Metals and Orla Mining
Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals and Orla Mining 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 SilverCrest Metals and Orla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverCrest Metals and Orla Mining, you can compare the effects of market volatilities on SilverCrest Metals and Orla Mining 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 SilverCrest Metals with a short position of Orla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and Orla Mining.
Diversification Opportunities for SilverCrest Metals and Orla Mining
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SilverCrest and Orla is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals and Orla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orla Mining and SilverCrest Metals 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 SilverCrest Metals are associated (or correlated) with Orla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orla Mining has no effect on the direction of SilverCrest Metals i.e., SilverCrest Metals and Orla Mining go up and down completely randomly.
Pair Corralation between SilverCrest Metals and Orla Mining
Assuming the 90 days trading horizon SilverCrest Metals is expected to generate 0.99 times more return on investment than Orla Mining. However, SilverCrest Metals is 1.01 times less risky than Orla Mining. It trades about -0.05 of its potential returns per unit of risk. Orla Mining is currently generating about -0.08 per unit of risk. If you would invest 1,484 in SilverCrest Metals on August 28, 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 |
SilverCrest Metals vs. Orla Mining
Performance |
| Timeline |
| SilverCrest Metals |
| Orla Mining |
SilverCrest Metals and Orla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverCrest Metals and Orla Mining
The main advantage of trading using opposite SilverCrest Metals and Orla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals position performs unexpectedly, Orla Mining 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 Orla Mining will offset losses from the drop in Orla Mining's long position.| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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