Correlation Between Fortuna Silver and Maple Gold

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

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

Diversification Opportunities for Fortuna Silver and Maple Gold

-0.01

Correlation Coefficient

Fortuna Silver  Maple Gold

Good diversification

The 3 months correlation between Fortuna and Maple is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines and Fortuna 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 Fortuna Silver Mines are associated (or correlated) with Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Maple Gold go up and down completely randomly.

Pair Corralation between Fortuna Silver and Maple Gold

Considering the 90-day investment horizon Fortuna Silver Mines is expected to generate 0.52 times more return on investment than Maple Gold. However, Fortuna Silver Mines is 1.91 times less risky than Maple Gold. It trades about 0.07 of its potential returns per unit of risk. Maple Gold Mines is currently generating about -0.06 per unit of risk. If you would invest  424.00  in Fortuna Silver Mines on September 2, 2024 and sell it today you would earn a total of  54.00  from holding Fortuna Silver Mines or generate 12.74% return on investment over 90 days.

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

Fortuna Silver Mines  vs.  Maple Gold Mines

Fortuna Silver Mines

Risk-Adjusted Performance

5 of 100

Modest

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

Maple Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maple Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Fortuna Silver and Maple Gold

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

The idea behind Fortuna Silver Mines and Maple Gold Mines 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.