Correlation Between Prosafe SE and MINCO SILVER

Can any of the company-specific risk be diversified away by investing in both Prosafe SE and MINCO SILVER 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 Prosafe SE and MINCO SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Prosafe SE and MINCO SILVER

-0.56

Correlation Coefficient

Prosafe SE  MINCO SILVER

Excellent diversification

The 3 months correlation between Prosafe and MINCO is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER and Prosafe SE 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 Prosafe SE are associated (or correlated) with MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of Prosafe SE i.e., Prosafe SE and MINCO SILVER go up and down completely randomly.

Pair Corralation between Prosafe SE and MINCO SILVER

Assuming the 90 days horizon Prosafe SE is expected to under-perform the MINCO SILVER. In addition to that, Prosafe SE is 4.16 times more volatile than MINCO SILVER. It trades about -0.03 of its total potential returns per unit of risk. MINCO SILVER is currently generating about -0.07 per unit of volatility. If you would invest  13.00  in MINCO SILVER on September 23, 2024 and sell it today you would lose (1.00) from holding MINCO SILVER or give up 7.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Prosafe SE  vs.  MINCO SILVER

Prosafe SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosafe SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MINCO SILVER

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MINCO SILVER are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, MINCO SILVER unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prosafe SE and MINCO SILVER

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

The idea behind Prosafe SE and MINCO SILVER 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.