Correlation Between IShares Physical and Thor Mining

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

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

Diversification Opportunities for IShares Physical and Thor Mining

0.42

Correlation Coefficient

IShares Physical  Thor Mining

Very weak diversification

The 3 months correlation between IShares and Thor is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and IShares Physical 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 iShares Physical Silver are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of IShares Physical i.e., IShares Physical and Thor Mining go up and down completely randomly.

Pair Corralation between IShares Physical and Thor Mining

Assuming the 90 days trading horizon iShares Physical Silver is expected to generate 0.38 times more return on investment than Thor Mining. However, iShares Physical Silver is 2.65 times less risky than Thor Mining. It trades about 0.04 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.04 per unit of risk. If you would invest  2,260  in iShares Physical Silver on October 10, 2024 and sell it today you would earn a total of  609.00  from holding iShares Physical Silver or generate 26.95% return on investment over 90 days.

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

iShares Physical Silver  vs.  Thor Mining PLC

iShares Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares Physical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Thor Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thor Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Thor Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Physical and Thor Mining

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

The idea behind iShares Physical Silver and Thor Mining PLC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.