Correlation Between SilverCrest Metals and Centaur Media

Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals and Centaur Media 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 SilverCrest Metals and Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SilverCrest Metals and Centaur Media, you can compare the effects of market volatilities on SilverCrest Metals and Centaur Media 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 SilverCrest Metals with a short position of Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and Centaur Media.

Diversification Opportunities for SilverCrest Metals and Centaur Media

-0.23

Correlation Coefficient

SilverCrest Metals  Centaur Media

Very good diversification

The 3 months correlation between SilverCrest and Centaur is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media and SilverCrest Metals 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 SilverCrest Metals are associated (or correlated) with Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of SilverCrest Metals i.e., SilverCrest Metals and Centaur Media go up and down completely randomly.

Pair Corralation between SilverCrest Metals and Centaur Media

Assuming the 90 days trading horizon SilverCrest Metals is expected to generate 2.6 times more return on investment than Centaur Media. However, SilverCrest Metals is 2.6 times more volatile than Centaur Media. It trades about 0.18 of its potential returns per unit of risk. Centaur Media is currently generating about 0.13 per unit of risk. If you would invest  1,395  in SilverCrest Metals on December 1, 2024 and sell it today you would earn a total of  220.00  from holding SilverCrest Metals or generate 15.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	22.58%
Values	Daily Returns

SilverCrest Metals  vs.  Centaur Media

SilverCrest Metals

Risk-Adjusted Performance

Good

Over the last 90 days SilverCrest Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, SilverCrest Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Centaur Media

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Media are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Centaur Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SilverCrest Metals and Centaur Media

The main advantage of trading using opposite SilverCrest Metals and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.

The idea behind SilverCrest Metals and Centaur Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.