Correlation Between Gatos Silver and MARATHON

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

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

Diversification Opportunities for Gatos Silver and MARATHON

0.0

Correlation Coefficient

Gatos Silver  MARATHON

Pay attention - limited upside

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

Pair Corralation between Gatos Silver and MARATHON

If you would invest  9,605  in MARATHON PETE P on December 23, 2024 and sell it today you would earn a total of  395.00  from holding MARATHON PETE P or generate 4.11% return on investment over 90 days.

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

Gatos Silver  vs.  MARATHON PETE P

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.

MARATHON PETE P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MARATHON PETE P are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MARATHON is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gatos Silver and MARATHON

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

The idea behind Gatos Silver and MARATHON PETE P 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.