Correlation Between Garibaldi Resources and Silver Spruce

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

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

Diversification Opportunities for Garibaldi Resources and Silver Spruce

0.15

Correlation Coefficient

Garibaldi Resources  Silver Spruce

Average diversification

The 3 months correlation between Garibaldi and Silver is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Garibaldi Resources Corp and Silver Spruce Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spruce Resources and Garibaldi Resources 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 Garibaldi Resources Corp are associated (or correlated) with Silver Spruce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spruce Resources has no effect on the direction of Garibaldi Resources i.e., Garibaldi Resources and Silver Spruce go up and down completely randomly.

Pair Corralation between Garibaldi Resources and Silver Spruce

Assuming the 90 days horizon Garibaldi Resources Corp is expected to generate 2.76 times more return on investment than Silver Spruce. However, Garibaldi Resources is 2.76 times more volatile than Silver Spruce Resources. It trades about 0.1 of its potential returns per unit of risk. Silver Spruce Resources is currently generating about -0.06 per unit of risk. If you would invest  5.00  in Garibaldi Resources Corp on October 9, 2024 and sell it today you would lose (1.90) from holding Garibaldi Resources Corp or give up 38.0% of portfolio value over 90 days.

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

Garibaldi Resources Corp  vs.  Silver Spruce Resources

Garibaldi Resources Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Garibaldi Resources Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Garibaldi Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Silver Spruce Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Spruce Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Garibaldi Resources and Silver Spruce

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

The idea behind Garibaldi Resources Corp and Silver Spruce 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.