Correlation Between AbraSilver Resource and New Pacific

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

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

Diversification Opportunities for AbraSilver Resource and New Pacific

0.83

Correlation Coefficient

AbraSilver Resource  New Pacific

Very poor diversification

The 3 months correlation between AbraSilver and New is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals and AbraSilver Resource 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 AbraSilver Resource Corp are associated (or correlated) with New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of AbraSilver Resource i.e., AbraSilver Resource and New Pacific go up and down completely randomly.

Pair Corralation between AbraSilver Resource and New Pacific

Assuming the 90 days horizon AbraSilver Resource Corp is expected to generate 1.32 times more return on investment than New Pacific. However, AbraSilver Resource is 1.32 times more volatile than New Pacific Metals. It trades about 0.25 of its potential returns per unit of risk. New Pacific Metals is currently generating about 0.0 per unit of risk. If you would invest  164.00  in AbraSilver Resource Corp on October 23, 2024 and sell it today you would earn a total of  28.00  from holding AbraSilver Resource Corp or generate 17.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

AbraSilver Resource Corp  vs.  New Pacific Metals

AbraSilver Resource Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AbraSilver Resource Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

New Pacific Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Pacific Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with AbraSilver Resource and New Pacific

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

The idea behind AbraSilver Resource Corp and New Pacific Metals 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.