Correlation Between AbraSilver Resource and Generation Mining

Can any of the company-specific risk be diversified away by investing in both AbraSilver Resource and Generation Mining 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 Generation Mining 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 Generation Mining, you can compare the effects of market volatilities on AbraSilver Resource and Generation Mining 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 Generation Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbraSilver Resource and Generation Mining.

Diversification Opportunities for AbraSilver Resource and Generation Mining

0.89

Correlation Coefficient

AbraSilver Resource  Generation Mining

Very poor diversification

The 3 months correlation between AbraSilver and Generation is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp and Generation Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Mining 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 Generation Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Mining has no effect on the direction of AbraSilver Resource i.e., AbraSilver Resource and Generation Mining go up and down completely randomly.

Pair Corralation between AbraSilver Resource and Generation Mining

Assuming the 90 days trading horizon AbraSilver Resource Corp is expected to generate 0.71 times more return on investment than Generation Mining. However, AbraSilver Resource Corp is 1.4 times less risky than Generation Mining. It trades about 0.26 of its potential returns per unit of risk. Generation Mining is currently generating about 0.16 per unit of risk. If you would invest  236.00  in AbraSilver Resource Corp on October 21, 2024 and sell it today you would earn a total of  43.00  from holding AbraSilver Resource Corp or generate 18.22% 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.  Generation Mining

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. In spite of fairly stable basic indicators, AbraSilver Resource is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Generation Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Generation Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AbraSilver Resource and Generation Mining

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

The idea behind AbraSilver Resource Corp and Generation 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.