Correlation Between Aftermath Silver and Dynacor Gold

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

By analyzing existing cross correlation between Aftermath Silver and Dynacor Gold Mines, you can compare the effects of market volatilities on Aftermath Silver and Dynacor Gold 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 Dynacor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aftermath Silver and Dynacor Gold.

Diversification Opportunities for Aftermath Silver and Dynacor Gold

-0.34

Correlation Coefficient

Aftermath Silver  Dynacor Gold

Very good diversification

The 3 months correlation between Aftermath and Dynacor is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Dynacor Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynacor Gold Mines 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 Dynacor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynacor Gold Mines has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Dynacor Gold go up and down completely randomly.

Pair Corralation between Aftermath Silver and Dynacor Gold

Assuming the 90 days horizon Aftermath Silver is expected to generate 2.65 times more return on investment than Dynacor Gold. However, Aftermath Silver is 2.65 times more volatile than Dynacor Gold Mines. It trades about 0.01 of its potential returns per unit of risk. Dynacor Gold Mines is currently generating about -0.06 per unit of risk. If you would invest  51.00  in Aftermath Silver on December 3, 2024 and sell it today you would lose (3.00) from holding Aftermath Silver or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Aftermath Silver  vs.  Dynacor Gold Mines

Aftermath Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aftermath Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aftermath Silver is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dynacor Gold Mines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynacor Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Aftermath Silver and Dynacor Gold

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

The idea behind Aftermath Silver and Dynacor Gold Mines 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.