Correlation Between Fortuna Silver and Argenta Silver

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

Diversification Opportunities for Fortuna Silver and Argenta Silver

0.2

Correlation Coefficient

Fortuna Silver  Argenta Silver

Modest diversification

The 3 months correlation between Fortuna and Argenta is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Argenta Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argenta Silver Corp 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 Argenta Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argenta Silver Corp has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Argenta Silver go up and down completely randomly.

Pair Corralation between Fortuna Silver and Argenta Silver

Assuming the 90 days trading horizon Fortuna Silver Mines is expected to generate 0.38 times more return on investment than Argenta Silver. However, Fortuna Silver Mines is 2.64 times less risky than Argenta Silver. It trades about 0.03 of its potential returns per unit of risk. Argenta Silver Corp is currently generating about 0.01 per unit of risk. If you would invest  484.00  in Fortuna Silver Mines on October 26, 2024 and sell it today you would earn a total of  155.00  from holding Fortuna Silver Mines or generate 32.02% return on investment over 90 days.

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

Fortuna Silver Mines  vs.  Argenta Silver Corp

Fortuna Silver Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortuna Silver Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Argenta Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argenta 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.

Pair Trading with Fortuna Silver and Argenta Silver

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

The idea behind Fortuna Silver Mines and Argenta Silver 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.