Correlation Between Aftermath Silver and Silver X

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

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

Diversification Opportunities for Aftermath Silver and Silver X

-0.19

Correlation Coefficient

Aftermath Silver  Silver X

Good diversification

The 3 months correlation between Aftermath and Silver is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Silver X Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver X Mining and Aftermath 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 Aftermath Silver are associated (or correlated) with Silver X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver X Mining has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Silver X go up and down completely randomly.

Pair Corralation between Aftermath Silver and Silver X

Assuming the 90 days horizon Aftermath Silver is expected to generate 1.1 times more return on investment than Silver X. However, Aftermath Silver is 1.1 times more volatile than Silver X Mining. It trades about 0.09 of its potential returns per unit of risk. Silver X Mining is currently generating about -0.03 per unit of risk. If you would invest  41.00  in Aftermath Silver on December 29, 2024 and sell it today you would earn a total of  10.00  from holding Aftermath Silver or generate 24.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Aftermath Silver  vs.  Silver X Mining

Aftermath Silver

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Aftermath Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Silver X Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver X Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Aftermath Silver and Silver X

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

The idea behind Aftermath Silver and Silver X Mining 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.