Correlation Between Gatos Silver and Mexus Gold

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

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

Diversification Opportunities for Gatos Silver and Mexus Gold

0.67

Correlation Coefficient

Gatos Silver  Mexus Gold

Poor diversification

The 3 months correlation between Gatos and Mexus is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Mexus Gold Us in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexus Gold Us 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 Mexus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexus Gold Us has no effect on the direction of Gatos Silver i.e., Gatos Silver and Mexus Gold go up and down completely randomly.

Pair Corralation between Gatos Silver and Mexus Gold

Given the investment horizon of 90 days Gatos Silver is expected to under-perform the Mexus Gold. But the stock apears to be less risky and, when comparing its historical volatility, Gatos Silver is 34.37 times less risky than Mexus Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Mexus Gold Us is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Mexus Gold Us on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Mexus Gold Us or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Gatos Silver  vs.  Mexus Gold Us

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 latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Mexus Gold Us

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexus Gold Us are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mexus Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gatos Silver and Mexus Gold

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

The idea behind Gatos Silver and Mexus Gold Us 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.