Correlation Between Commerce Resources and Silver Elephant

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

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

Diversification Opportunities for Commerce Resources and Silver Elephant

0.16

Correlation Coefficient

Commerce Resources  Silver Elephant

Average diversification

The 3 months correlation between Commerce and Silver is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Commerce Resources Corp and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining and Commerce Resources 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 Commerce Resources Corp are associated (or correlated) with Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of Commerce Resources i.e., Commerce Resources and Silver Elephant go up and down completely randomly.

Pair Corralation between Commerce Resources and Silver Elephant

Assuming the 90 days horizon Commerce Resources Corp is expected to generate 0.53 times more return on investment than Silver Elephant. However, Commerce Resources Corp is 1.88 times less risky than Silver Elephant. It trades about 0.04 of its potential returns per unit of risk. Silver Elephant Mining is currently generating about -0.01 per unit of risk. If you would invest  5.00  in Commerce Resources Corp on December 29, 2024 and sell it today you would earn a total of  0.20  from holding Commerce Resources Corp or generate 4.0% return on investment over 90 days.

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

Commerce Resources Corp  vs.  Silver Elephant Mining

Commerce Resources Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Commerce Resources Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Commerce Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Silver Elephant Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver Elephant Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Silver Elephant is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Commerce Resources and Silver Elephant

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

The idea behind Commerce Resources Corp and Silver Elephant Mining 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.