Correlation Between Defiance Silver and ValOre Metals

Can any of the company-specific risk be diversified away by investing in both Defiance Silver and ValOre 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 Defiance Silver and ValOre Metals 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 ValOre Metals Corp, you can compare the effects of market volatilities on Defiance Silver and ValOre 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 Defiance Silver with a short position of ValOre Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Defiance Silver and ValOre Metals.

Diversification Opportunities for Defiance Silver and ValOre Metals

0.86

Correlation Coefficient

Defiance Silver  ValOre Metals

Very poor diversification

The 3 months correlation between Defiance and ValOre is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Silver Corp and ValOre Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ValOre Metals Corp 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 ValOre Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ValOre Metals Corp has no effect on the direction of Defiance Silver i.e., Defiance Silver and ValOre Metals go up and down completely randomly.

Pair Corralation between Defiance Silver and ValOre Metals

Assuming the 90 days horizon Defiance Silver is expected to generate 1.34 times less return on investment than ValOre Metals. But when comparing it to its historical volatility, Defiance Silver Corp is 1.31 times less risky than ValOre Metals. It trades about 0.07 of its potential returns per unit of risk. ValOre Metals Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5.00  in ValOre Metals Corp on October 22, 2024 and sell it today you would earn a total of  3.00  from holding ValOre Metals Corp or generate 60.0% 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.  ValOre Metals Corp

Defiance Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Defiance Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

ValOre Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ValOre Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Defiance Silver and ValOre Metals

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

The idea behind Defiance Silver Corp and ValOre Metals Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.