Correlation Between Silver Bull and Sky Gold
Can any of the company-specific risk be diversified away by investing in both Silver Bull and Sky Gold 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 Bull and Sky Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Bull Resources and Sky Gold Corp, you can compare the effects of market volatilities on Silver Bull and Sky Gold 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 Bull with a short position of Sky Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Bull and Sky Gold.
Diversification Opportunities for Silver Bull and Sky Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Silver and Sky is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bull Resources and Sky Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Gold Corp and Silver Bull 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 Bull Resources are associated (or correlated) with Sky Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Gold Corp has no effect on the direction of Silver Bull i.e., Silver Bull and Sky Gold go up and down completely randomly.
Pair Corralation between Silver Bull and Sky Gold
Assuming the 90 days trading horizon Silver Bull is expected to generate 1.4 times less return on investment than Sky Gold. But when comparing it to its historical volatility, Silver Bull Resources is 2.09 times less risky than Sky Gold. It trades about 0.02 of its potential returns per unit of risk. Sky Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Sky Gold Corp on September 2, 2024 and sell it today you would lose (3.00) from holding Sky Gold Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Bull Resources vs. Sky Gold Corp
Performance |
| Timeline |
| Silver Bull Resources |
| Sky Gold Corp |
Silver Bull and Sky Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Bull and Sky Gold
The main advantage of trading using opposite Silver Bull and Sky Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Bull position performs unexpectedly, Sky Gold 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 Sky Gold will offset losses from the drop in Sky Gold's long position.| Silver Bull vs. Silver Predator Corp | Silver Bull vs. Silver Range Resources | Silver Bull vs. Stakeholder Gold Corp | Silver Bull vs. Loncor Resources |
| Sky Gold vs. ArcWest Exploration | Sky Gold vs. Golden Ridge Resources | Sky Gold vs. Silver Bull Resources | Sky Gold vs. Silver Predator 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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