Correlation Between Buyer Group and Gatos Silver

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

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

Diversification Opportunities for Buyer Group and Gatos Silver

-0.19

Correlation Coefficient

Buyer Group  Gatos Silver

Good diversification

The 3 months correlation between Buyer and Gatos is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Buyer Group International and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Buyer Group 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 Buyer Group International 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 Buyer Group i.e., Buyer Group and Gatos Silver go up and down completely randomly.

Pair Corralation between Buyer Group and Gatos Silver

Given the investment horizon of 90 days Buyer Group International is expected to generate 2.37 times more return on investment than Gatos Silver. However, Buyer Group is 2.37 times more volatile than Gatos Silver. It trades about 0.0 of its potential returns per unit of risk. Gatos Silver is currently generating about -0.05 per unit of risk. If you would invest  0.18  in Buyer Group International on September 26, 2024 and sell it today you would lose (0.04) from holding Buyer Group International or give up 22.22% of portfolio value over 90 days.

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

Buyer Group International  vs.  Gatos Silver

Buyer Group International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Buyer Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Buyer Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Gatos Silver

Risk-Adjusted Performance

0 of 100

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 latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Buyer Group and Gatos Silver

The main advantage of trading using opposite Buyer Group and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buyer Group 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 Buyer Group International 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.