Correlation Between Bald Eagle and Silver One

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

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

Diversification Opportunities for Bald Eagle and Silver One

0.03

Correlation Coefficient

Bald Eagle  Silver One

Significant diversification

The 3 months correlation between Bald and Silver is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bald Eagle Gold and Silver One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver One Resources and Bald Eagle 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 Bald Eagle Gold are associated (or correlated) with Silver One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver One Resources has no effect on the direction of Bald Eagle i.e., Bald Eagle and Silver One go up and down completely randomly.

Pair Corralation between Bald Eagle and Silver One

Assuming the 90 days horizon Bald Eagle Gold is expected to generate 0.44 times more return on investment than Silver One. However, Bald Eagle Gold is 2.28 times less risky than Silver One. It trades about 0.21 of its potential returns per unit of risk. Silver One Resources is currently generating about 0.08 per unit of risk. If you would invest  39.00  in Bald Eagle Gold on November 28, 2024 and sell it today you would earn a total of  7.00  from holding Bald Eagle Gold or generate 17.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Bald Eagle Gold  vs.  Silver One Resources

Bald Eagle Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bald Eagle Gold are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Bald Eagle reported solid returns over the last few months and may actually be approaching a breakup point.

Silver One Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silver One Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Silver One reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bald Eagle and Silver One

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

The idea behind Bald Eagle Gold and Silver One Resources 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.