Correlation Between Highland Copper and GR Silver

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

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

Diversification Opportunities for Highland Copper and GR Silver

0.28

Correlation Coefficient

Highland Copper  GR Silver

Modest diversification

The 3 months correlation between Highland and GRSL is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Highland Copper and GR Silver Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GR Silver Mining and Highland Copper 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 Highland Copper are associated (or correlated) with GR Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GR Silver Mining has no effect on the direction of Highland Copper i.e., Highland Copper and GR Silver go up and down completely randomly.

Pair Corralation between Highland Copper and GR Silver

Given the investment horizon of 90 days Highland Copper is expected to under-perform the GR Silver. In addition to that, Highland Copper is 1.35 times more volatile than GR Silver Mining. It trades about -0.14 of its total potential returns per unit of risk. GR Silver Mining is currently generating about -0.18 per unit of volatility. If you would invest  21.00  in GR Silver Mining on October 8, 2024 and sell it today you would lose (3.00) from holding GR Silver Mining or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

Highland Copper  vs.  GR Silver Mining

Highland Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highland Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

GR Silver Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GR Silver Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Highland Copper and GR Silver

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

The idea behind Highland Copper and GR Silver Mining 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.