Correlation Between Clifton Mining and SilverCrest Metals

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

By analyzing existing cross correlation between Clifton Mining Co and SilverCrest Metals, you can compare the effects of market volatilities on Clifton Mining and SilverCrest Metals 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 Clifton Mining with a short position of SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clifton Mining and SilverCrest Metals.

Diversification Opportunities for Clifton Mining and SilverCrest Metals

0.02

Correlation Coefficient

Clifton Mining  SilverCrest Metals

Significant diversification

The 3 months correlation between Clifton and SilverCrest is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and Clifton Mining 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 Clifton Mining Co are associated (or correlated) with SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Clifton Mining i.e., Clifton Mining and SilverCrest Metals go up and down completely randomly.

Pair Corralation between Clifton Mining and SilverCrest Metals

Given the investment horizon of 90 days Clifton Mining Co is expected to under-perform the SilverCrest Metals. In addition to that, Clifton Mining is 2.76 times more volatile than SilverCrest Metals. It trades about -0.09 of its total potential returns per unit of risk. SilverCrest Metals is currently generating about 0.12 per unit of volatility. If you would invest  939.00  in SilverCrest Metals on October 26, 2024 and sell it today you would earn a total of  63.00  from holding SilverCrest Metals or generate 6.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Clifton Mining Co  vs.  SilverCrest Metals

Clifton Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clifton Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

SilverCrest Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SilverCrest Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, SilverCrest Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Clifton Mining and SilverCrest Metals

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

The idea behind Clifton Mining Co and SilverCrest Metals 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.