Correlation Between Silver One and Red Pine
Can any of the company-specific risk be diversified away by investing in both Silver One and Red Pine 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 Silver One and Red Pine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver One Resources and Red Pine Exploration, you can compare the effects of market volatilities on Silver One and Red Pine 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 Silver One with a short position of Red Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver One and Red Pine.
Diversification Opportunities for Silver One and Red Pine
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Silver and Red is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Silver One Resources and Red Pine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Pine Exploration and Silver One 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 Silver One Resources are associated (or correlated) with Red Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Pine Exploration has no effect on the direction of Silver One i.e., Silver One and Red Pine go up and down completely randomly.
Pair Corralation between Silver One and Red Pine
Assuming the 90 days horizon Silver One Resources is expected to generate 1.94 times more return on investment than Red Pine. However, Silver One is 1.94 times more volatile than Red Pine Exploration. It trades about 0.08 of its potential returns per unit of risk. Red Pine Exploration is currently generating about 0.12 per unit of risk. If you would invest 14.00 in Silver One Resources on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Silver One Resources or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver One Resources vs. Red Pine Exploration
Performance |
| Timeline |
| Silver One Resources |
| Red Pine Exploration |
Silver One and Red Pine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver One and Red Pine
The main advantage of trading using opposite Silver One and Red Pine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver One position performs unexpectedly, Red Pine 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 Red Pine will offset losses from the drop in Red Pine's long position.| Silver One vs. Silver Hammer Mining | Silver One vs. Bald Eagle Gold | Silver One vs. Discovery Metals Corp | Silver One vs. IMPACT Silver Corp |
| Red Pine vs. Endurance Gold | Red Pine vs. Altamira Gold Corp | Red Pine vs. Grande Portage Resources | Red Pine vs. Tectonic Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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