Correlation Between Americas Gold and Silver Mines
Can any of the company-specific risk be diversified away by investing in both Americas Gold and Silver Mines 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 Silver Mines 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 Silver Mines Limited, you can compare the effects of market volatilities on Americas Gold and Silver Mines 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 Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Gold and Silver Mines.
Diversification Opportunities for Americas Gold and Silver Mines
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americas and Silver is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Americas Gold and and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited 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 Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Americas Gold i.e., Americas Gold and Silver Mines go up and down completely randomly.
Pair Corralation between Americas Gold and Silver Mines
Assuming the 90 days trading horizon Americas Gold and is expected to generate 0.74 times more return on investment than Silver Mines. However, Americas Gold and is 1.35 times less risky than Silver Mines. It trades about -0.05 of its potential returns per unit of risk. Silver Mines Limited 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americas Gold and vs. Silver Mines Limited
Performance |
| Timeline |
| Americas Gold |
| Silver Mines Limited |
Americas Gold and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americas Gold and Silver Mines
The main advantage of trading using opposite Americas Gold and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Gold position performs unexpectedly, Silver Mines 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 Mines will offset losses from the drop in Silver Mines' 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 |
| Silver Mines vs. Pan American Silver | Silver Mines vs. First Majestic Silver | Silver Mines vs. MAG Silver Corp | Silver Mines vs. Silvercorp Metals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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