Correlation Between Gatos Silver and Apartment Investment

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

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

Diversification Opportunities for Gatos Silver and Apartment Investment

-0.32

Correlation Coefficient

Gatos Silver  Apartment Investment

Very good diversification

The 3 months correlation between Gatos and Apartment is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and and Gatos 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 Gatos Silver are associated (or correlated) with Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of Gatos Silver i.e., Gatos Silver and Apartment Investment go up and down completely randomly.

Pair Corralation between Gatos Silver and Apartment Investment

Given the investment horizon of 90 days Gatos Silver is expected to under-perform the Apartment Investment. In addition to that, Gatos Silver is 1.73 times more volatile than Apartment Investment and. It trades about -0.14 of its total potential returns per unit of risk. Apartment Investment and is currently generating about 0.09 per unit of volatility. If you would invest  813.00  in Apartment Investment and on October 26, 2024 and sell it today you would earn a total of  80.00  from holding Apartment Investment and or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

Gatos Silver  vs.  Apartment Investment and

Gatos Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Apartment Investment and

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Apartment Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gatos Silver and Apartment Investment

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

The idea behind Gatos Silver and Apartment Investment and 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.