Correlation Between Defiance Silver and GR Silver

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

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

Diversification Opportunities for Defiance Silver and GR Silver

0.83

Correlation Coefficient

Defiance Silver  GR Silver

Very poor diversification

The 3 months correlation between Defiance and GRSL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Silver Corp and GR Silver Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GR Silver Mining and Defiance Silver 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 Defiance Silver Corp are associated (or correlated) with GR Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GR Silver Mining has no effect on the direction of Defiance Silver i.e., Defiance Silver and GR Silver go up and down completely randomly.

Pair Corralation between Defiance Silver and GR Silver

Assuming the 90 days horizon Defiance Silver is expected to generate 1.04 times less return on investment than GR Silver. In addition to that, Defiance Silver is 1.02 times more volatile than GR Silver Mining. It trades about 0.04 of its total potential returns per unit of risk. GR Silver Mining is currently generating about 0.04 per unit of volatility. If you would invest  14.00  in GR Silver Mining on September 4, 2024 and sell it today you would earn a total of  5.00  from holding GR Silver Mining or generate 35.71% return on investment over 90 days.

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

Defiance Silver Corp  vs.  GR Silver Mining

Defiance Silver Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance Silver Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Defiance Silver may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GR Silver Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GR Silver Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, GR Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Defiance Silver and GR Silver

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

The idea behind Defiance Silver Corp and GR Silver 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.