Correlation Between Southern Silver and Auxico Resources
Can any of the company-specific risk be diversified away by investing in both Southern Silver and Auxico Resources 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 Southern Silver and Auxico Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Silver Exploration and Auxico Resources Canada, you can compare the effects of market volatilities on Southern Silver and Auxico Resources 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 Southern Silver with a short position of Auxico Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Silver and Auxico Resources.
Diversification Opportunities for Southern Silver and Auxico Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and Auxico is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Southern Silver Exploration and Auxico Resources Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxico Resources Canada and Southern Silver 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 Southern Silver Exploration are associated (or correlated) with Auxico Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxico Resources Canada has no effect on the direction of Southern Silver i.e., Southern Silver and Auxico Resources go up and down completely randomly.
Pair Corralation between Southern Silver and Auxico Resources
Assuming the 90 days horizon Southern Silver Exploration is expected to under-perform the Auxico Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Southern Silver Exploration is 9.06 times less risky than Auxico Resources. The otc stock trades about 0.0 of its potential returns per unit of risk. The Auxico Resources Canada is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Auxico Resources Canada on September 3, 2024 and sell it today you would lose (4.40) from holding Auxico Resources Canada or give up 88.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Silver Exploration vs. Auxico Resources Canada
Performance |
| Timeline |
| Southern Silver Expl |
| Auxico Resources Canada |
Southern Silver and Auxico Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Silver and Auxico Resources
The main advantage of trading using opposite Southern Silver and Auxico Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Silver position performs unexpectedly, Auxico Resources 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 Auxico Resources will offset losses from the drop in Auxico Resources' long position.| Southern Silver vs. Star Royalties | Southern Silver vs. Defiance Silver Corp | Southern Silver vs. Diamond Fields Resources | Southern Silver vs. GoGold Resources |
| Auxico Resources vs. Cartier Iron Corp | Auxico Resources vs. Arctic Star Exploration | Auxico Resources vs. Capella Minerals Limited | Auxico Resources vs. Denarius Silver 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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