Correlation Between Americas Silver and Searchlight Resources
Can any of the company-specific risk be diversified away by investing in both Americas Silver and Searchlight 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 Searchlight 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 Searchlight Resources, you can compare the effects of market volatilities on Americas Silver and Searchlight 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 Searchlight Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Silver and Searchlight Resources.
Diversification Opportunities for Americas Silver and Searchlight Resources
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Americas and Searchlight is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Americas Silver Corp and Searchlight Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Searchlight 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 Searchlight Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Searchlight Resources has no effect on the direction of Americas Silver i.e., Americas Silver and Searchlight Resources go up and down completely randomly.
Pair Corralation between Americas Silver and Searchlight Resources
Given the investment horizon of 90 days Americas Silver Corp is expected to under-perform the Searchlight Resources. But the stock apears to be less risky and, when comparing its historical volatility, Americas Silver Corp is 1.96 times less risky than Searchlight Resources. The stock trades about -0.08 of its potential returns per unit of risk. The Searchlight Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.46 in Searchlight Resources on September 1, 2024 and sell it today you would lose (0.05) from holding Searchlight Resources or give up 10.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Americas Silver Corp vs. Searchlight Resources
Performance |
| Timeline |
| Americas Silver Corp |
| Searchlight Resources |
Americas Silver and Searchlight Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americas Silver and Searchlight Resources
The main advantage of trading using opposite Americas Silver and Searchlight Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Silver position performs unexpectedly, Searchlight 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 Searchlight Resources will offset losses from the drop in Searchlight 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 |
| Searchlight Resources vs. ATT Inc | Searchlight Resources vs. Merck Company | Searchlight Resources vs. Walt Disney | Searchlight Resources vs. Caterpillar |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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