Correlation Between Gatos Silver and Braveheart Resources

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

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

Diversification Opportunities for Gatos Silver and Braveheart Resources

0.0

Correlation Coefficient

Gatos Silver  Braveheart Resources

Pay attention - limited upside

The 3 months correlation between Gatos and Braveheart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Braveheart Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braveheart Resources 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 Braveheart Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braveheart Resources has no effect on the direction of Gatos Silver i.e., Gatos Silver and Braveheart Resources go up and down completely randomly.

Pair Corralation between Gatos Silver and Braveheart Resources

If you would invest  2.45  in Braveheart Resources on December 30, 2024 and sell it today you would lose (0.17) from holding Braveheart Resources or give up 6.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gatos Silver  vs.  Braveheart Resources

Gatos Silver

Risk-Adjusted Performance

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 very healthy basic indicators, Gatos Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Braveheart Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Braveheart Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Braveheart Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gatos Silver and Braveheart Resources

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

The idea behind Gatos Silver and Braveheart Resources 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.