Correlation Between Americas Silver and Durango Resources
Can any of the company-specific risk be diversified away by investing in both Americas Silver and Durango 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 Americas Silver and Durango Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americas Silver Corp and Durango Resources, you can compare the effects of market volatilities on Americas Silver and Durango 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 Americas Silver with a short position of Durango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Silver and Durango Resources.
Diversification Opportunities for Americas Silver and Durango Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Americas and Durango is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Americas Silver Corp and Durango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durango Resources and Americas 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 Americas Silver Corp are associated (or correlated) with Durango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durango Resources has no effect on the direction of Americas Silver i.e., Americas Silver and Durango Resources go up and down completely randomly.
Pair Corralation between Americas Silver and Durango Resources
Given the investment horizon of 90 days Americas Silver Corp is expected to under-perform the Durango Resources. But the stock apears to be less risky and, when comparing its historical volatility, Americas Silver Corp is 1.95 times less risky than Durango Resources. The stock trades about -0.08 of its potential returns per unit of risk. The Durango Resources is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1.80 in Durango Resources on September 1, 2024 and sell it today you would lose (0.32) from holding Durango Resources or give up 17.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Americas Silver Corp vs. Durango Resources
Performance |
| Timeline |
| Americas Silver Corp |
| Durango Resources |
Americas Silver and Durango Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americas Silver and Durango Resources
The main advantage of trading using opposite Americas Silver and Durango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Silver position performs unexpectedly, Durango 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 Durango Resources will offset losses from the drop in Durango Resources' long position.| Americas Silver vs. BHP Group Limited | Americas Silver vs. Teck Resources Ltd | Americas Silver vs. Lithium Americas Corp | Americas Silver vs. MP Materials Corp |
| Durango Resources vs. Avarone Metals | Durango Resources vs. Amarc Resources | Durango Resources vs. Pampa Metals | Durango Resources vs. Sun Summit Minerals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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