Correlation Between Americas Gold and Pan American
Can any of the company-specific risk be diversified away by investing in both Americas Gold and Pan American 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 Americas Gold and Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americas Gold and and Pan American Silver, you can compare the effects of market volatilities on Americas Gold and Pan American 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 Americas Gold with a short position of Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Gold and Pan American.
Diversification Opportunities for Americas Gold and Pan American
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Americas and Pan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Americas Gold and and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver and Americas Gold 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 Americas Gold and are associated (or correlated) with Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Americas Gold i.e., Americas Gold and Pan American go up and down completely randomly.
Pair Corralation between Americas Gold and Pan American
Assuming the 90 days trading horizon Americas Gold and is expected to generate 1.65 times more return on investment than Pan American. However, Americas Gold is 1.65 times more volatile than Pan American Silver. It trades about -0.05 of its potential returns per unit of risk. Pan American Silver is currently generating about -0.11 per unit of risk. If you would invest 38.00 in Americas Gold and on September 23, 2024 and sell it today you would lose (3.00) from holding Americas Gold and or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americas Gold and vs. Pan American Silver
Performance |
| Timeline |
| Americas Gold |
| Pan American Silver |
Americas Gold and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americas Gold and Pan American
The main advantage of trading using opposite Americas Gold and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Gold position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American's long position.| Americas Gold vs. Pan American Silver | Americas Gold vs. First Majestic Silver | Americas Gold vs. MAG Silver Corp | Americas Gold vs. Silvercorp Metals |
| Pan American vs. First Majestic Silver | Pan American vs. MAG Silver Corp | Pan American vs. Silvercorp Metals | Pan American vs. Endeavour 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |