Correlation Between Defiance Silver and Ximen Mining

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

Diversification Opportunities for Defiance Silver and Ximen Mining

0.7

Correlation Coefficient

Defiance Silver  Ximen Mining

Poor diversification

The 3 months correlation between Defiance and Ximen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Defiance Silver Corp and Ximen Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ximen Mining 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 Ximen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ximen Mining Corp has no effect on the direction of Defiance Silver i.e., Defiance Silver and Ximen Mining go up and down completely randomly.

Pair Corralation between Defiance Silver and Ximen Mining

Assuming the 90 days horizon Defiance Silver is expected to generate 40.93 times less return on investment than Ximen Mining. But when comparing it to its historical volatility, Defiance Silver Corp is 10.15 times less risky than Ximen Mining. It trades about 0.03 of its potential returns per unit of risk. Ximen Mining Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  68.00  in Ximen Mining Corp on October 4, 2024 and sell it today you would lose (60.50) from holding Ximen Mining Corp or give up 88.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.55%
Values	Daily Returns

Defiance Silver Corp  vs.  Ximen Mining 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 unfluctuating 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.

Ximen Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ximen Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Defiance Silver and Ximen Mining

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

The idea behind Defiance Silver Corp and Ximen Mining 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.