Correlation Between Progressive Planet and Americas Silver

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

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

Diversification Opportunities for Progressive Planet and Americas Silver

0.53

Correlation Coefficient

Progressive Planet  Americas Silver

Very weak diversification

The 3 months correlation between Progressive and Americas is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Planet Solutions and Americas Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Silver Corp and Progressive Planet 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 Progressive Planet Solutions are associated (or correlated) with Americas Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Silver Corp has no effect on the direction of Progressive Planet i.e., Progressive Planet and Americas Silver go up and down completely randomly.

Pair Corralation between Progressive Planet and Americas Silver

Assuming the 90 days horizon Progressive Planet Solutions is expected to generate 1.09 times more return on investment than Americas Silver. However, Progressive Planet is 1.09 times more volatile than Americas Silver Corp. It trades about 0.17 of its potential returns per unit of risk. Americas Silver Corp is currently generating about 0.13 per unit of risk. If you would invest  7.30  in Progressive Planet Solutions on August 30, 2024 and sell it today you would earn a total of  5.70  from holding Progressive Planet Solutions or generate 78.08% return on investment over 90 days.

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

Progressive Planet Solutions  vs.  Americas Silver Corp

Progressive Planet

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.

Americas Silver Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Americas Silver Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Americas Silver unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Progressive Planet and Americas Silver

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

The idea behind Progressive Planet Solutions and Americas Silver Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.