Correlation Between Stellar AfricaGold and Silver Spruce
Can any of the company-specific risk be diversified away by investing in both Stellar AfricaGold and Silver Spruce 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 Stellar AfricaGold and Silver Spruce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar AfricaGold and Silver Spruce Resources, you can compare the effects of market volatilities on Stellar AfricaGold and Silver Spruce 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 Stellar AfricaGold with a short position of Silver Spruce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar AfricaGold and Silver Spruce.
Diversification Opportunities for Stellar AfricaGold and Silver Spruce
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stellar and Silver is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stellar AfricaGold and Silver Spruce Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spruce Resources and Stellar AfricaGold 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 Stellar AfricaGold are associated (or correlated) with Silver Spruce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spruce Resources has no effect on the direction of Stellar AfricaGold i.e., Stellar AfricaGold and Silver Spruce go up and down completely randomly.
Pair Corralation between Stellar AfricaGold and Silver Spruce
Assuming the 90 days horizon Stellar AfricaGold is expected to generate 1.92 times less return on investment than Silver Spruce. But when comparing it to its historical volatility, Stellar AfricaGold is 1.38 times less risky than Silver Spruce. It trades about 0.07 of its potential returns per unit of risk. Silver Spruce Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Silver Spruce Resources on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Silver Spruce Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellar AfricaGold vs. Silver Spruce Resources
Performance |
| Timeline |
| Stellar AfricaGold |
| Silver Spruce Resources |
Stellar AfricaGold and Silver Spruce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar AfricaGold and Silver Spruce
The main advantage of trading using opposite Stellar AfricaGold and Silver Spruce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar AfricaGold position performs unexpectedly, Silver Spruce 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 Spruce will offset losses from the drop in Silver Spruce's long position.| Stellar AfricaGold vs. First Majestic Silver | Stellar AfricaGold vs. Ivanhoe Energy | Stellar AfricaGold vs. Orezone Gold Corp | Stellar AfricaGold vs. Faraday Copper Corp |
| Silver Spruce vs. Sandfire Resources America | Silver Spruce vs. Slam Exploration | Silver Spruce vs. Richmond Minerals | Silver Spruce vs. Stellar AfricaGold |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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