Correlation Between Catalyst Metals and Gatos Silver

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

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

Diversification Opportunities for Catalyst Metals and Gatos Silver

0.0

Correlation Coefficient

Catalyst Metals  Gatos Silver

Pay attention - limited upside

The 3 months correlation between Catalyst and Gatos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Metals Limited and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Catalyst Metals 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 Catalyst Metals Limited 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 Catalyst Metals i.e., Catalyst Metals and Gatos Silver go up and down completely randomly.

Pair Corralation between Catalyst Metals and Gatos Silver

If you would invest  176.00  in Catalyst Metals Limited on December 20, 2024 and sell it today you would earn a total of  109.00  from holding Catalyst Metals Limited or generate 61.93% return on investment over 90 days.

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

Catalyst Metals Limited  vs.  Gatos Silver

Catalyst Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Metals Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, Catalyst Metals reported solid returns over the last few months and may actually be approaching a breakup point.

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 Catalyst Metals and Gatos Silver

The main advantage of trading using opposite Catalyst Metals and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Metals 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 Catalyst Metals Limited 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.