Correlation Between Silver Hammer and Dolly Varden

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

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

Diversification Opportunities for Silver Hammer and Dolly Varden

-0.14

Correlation Coefficient

Silver Hammer  Dolly Varden

Good diversification

The 3 months correlation between Silver and Dolly is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Silver Hammer Mining and Dolly Varden Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolly Varden Silver and Silver Hammer 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 Silver Hammer Mining are associated (or correlated) with Dolly Varden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolly Varden Silver has no effect on the direction of Silver Hammer i.e., Silver Hammer and Dolly Varden go up and down completely randomly.

Pair Corralation between Silver Hammer and Dolly Varden

Assuming the 90 days horizon Silver Hammer Mining is expected to generate 14.88 times more return on investment than Dolly Varden. However, Silver Hammer is 14.88 times more volatile than Dolly Varden Silver. It trades about 0.18 of its potential returns per unit of risk. Dolly Varden Silver is currently generating about -0.1 per unit of risk. If you would invest  3.81  in Silver Hammer Mining on November 28, 2024 and sell it today you would earn a total of  4.89  from holding Silver Hammer Mining or generate 128.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Silver Hammer Mining  vs.  Dolly Varden Silver

Silver Hammer Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Hammer Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Silver Hammer reported solid returns over the last few months and may actually be approaching a breakup point.

Dolly Varden Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dolly Varden Silver 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 essential indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Silver Hammer and Dolly Varden

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

The idea behind Silver Hammer Mining and Dolly Varden Silver 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.