Correlation Between Silver Spruce and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Silver Spruce and Huntsman Exploration 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 Spruce and Huntsman Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Spruce Resources and Huntsman Exploration, you can compare the effects of market volatilities on Silver Spruce and Huntsman Exploration 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 Spruce with a short position of Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Spruce and Huntsman Exploration.
Diversification Opportunities for Silver Spruce and Huntsman Exploration
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Silver and Huntsman is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Silver Spruce Resources and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration and Silver Spruce 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 Spruce Resources are associated (or correlated) with Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Silver Spruce i.e., Silver Spruce and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Silver Spruce and Huntsman Exploration
Assuming the 90 days horizon Silver Spruce Resources is expected to under-perform the Huntsman Exploration. In addition to that, Silver Spruce is 1.37 times more volatile than Huntsman Exploration. It trades about 0.0 of its total potential returns per unit of risk. Huntsman Exploration is currently generating about 0.09 per unit of volatility. If you would invest 2.40 in Huntsman Exploration on October 15, 2024 and sell it today you would earn a total of 0.20 from holding Huntsman Exploration or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Spruce Resources vs. Huntsman Exploration
Performance |
| Timeline |
| Silver Spruce Resources |
| Huntsman Exploration |
Silver Spruce and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Spruce and Huntsman Exploration
The main advantage of trading using opposite Silver Spruce and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Spruce position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Silver Spruce vs. Portofino Resources | Silver Spruce vs. Freegold Ventures Limited | Silver Spruce vs. Bravada Gold | Silver Spruce vs. Monitor Ventures |
| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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