Correlation Between SilverCrest Metals and New Pacific
Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals and New Pacific 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 New Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverCrest Metals and New Pacific Metals, you can compare the effects of market volatilities on SilverCrest Metals and New Pacific 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 New Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and New Pacific.
Diversification Opportunities for SilverCrest Metals and New Pacific
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SilverCrest and New is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals 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 New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of SilverCrest Metals i.e., SilverCrest Metals and New Pacific go up and down completely randomly.
Pair Corralation between SilverCrest Metals and New Pacific
Given the investment horizon of 90 days SilverCrest Metals is expected to generate 1.08 times more return on investment than New Pacific. However, SilverCrest Metals is 1.08 times more volatile than New Pacific Metals. It trades about -0.07 of its potential returns per unit of risk. New Pacific Metals is currently generating about -0.22 per unit of risk. If you would invest 1,066 in SilverCrest Metals on August 27, 2024 and sell it today you would lose (76.00) from holding SilverCrest Metals or give up 7.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SilverCrest Metals vs. New Pacific Metals
Performance |
| Timeline |
| SilverCrest Metals |
| New Pacific Metals |
SilverCrest Metals and New Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverCrest Metals and New Pacific
The main advantage of trading using opposite SilverCrest Metals and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's long position.| SilverCrest Metals vs. Hecla Mining | SilverCrest Metals vs. McEwen Mining | SilverCrest Metals vs. Endeavour Silver Corp | SilverCrest Metals vs. New Pacific Metals |
| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |