Correlation Between Compania and Gatos Silver

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

By analyzing existing cross correlation between Compania de Minas and Gatos Silver, you can compare the effects of market volatilities on Compania and Gatos 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 Compania with a short position of Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Gatos Silver.

Diversification Opportunities for Compania and Gatos Silver

0.0

Correlation Coefficient

Compania  Gatos Silver

Pay attention - limited upside

The 3 months correlation between Compania and Gatos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Minas and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Compania 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 Compania de Minas are associated (or correlated) with Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Compania i.e., Compania and Gatos Silver go up and down completely randomly.

Pair Corralation between Compania and Gatos Silver

If you would invest  1,210  in Compania de Minas on November 28, 2024 and sell it today you would earn a total of  65.00  from holding Compania de Minas or generate 5.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Compania de Minas  vs.  Gatos Silver

Compania de Minas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Minas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Compania may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Gatos Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gatos Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Compania and Gatos Silver

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

The idea behind Compania de Minas and Gatos Silver 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.