Correlation Between IMPACT Silver and Apollo Silver

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

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

Diversification Opportunities for IMPACT Silver and Apollo Silver

0.67

Correlation Coefficient

IMPACT Silver  Apollo Silver

Poor diversification

The 3 months correlation between IMPACT and Apollo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding IMPACT Silver Corp and Apollo Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Silver Corp and IMPACT 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 IMPACT Silver Corp are associated (or correlated) with Apollo Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Silver Corp has no effect on the direction of IMPACT Silver i.e., IMPACT Silver and Apollo Silver go up and down completely randomly.

Pair Corralation between IMPACT Silver and Apollo Silver

Assuming the 90 days horizon IMPACT Silver is expected to generate 2.94 times less return on investment than Apollo Silver. But when comparing it to its historical volatility, IMPACT Silver Corp is 1.11 times less risky than Apollo Silver. It trades about 0.02 of its potential returns per unit of risk. Apollo Silver Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Apollo Silver Corp on October 25, 2024 and sell it today you would earn a total of  3.00  from holding Apollo Silver Corp or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.19%
Values	Daily Returns

IMPACT Silver Corp  vs.  Apollo Silver Corp

IMPACT Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMPACT Silver Corp 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Apollo Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators 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 IMPACT Silver and Apollo Silver

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

The idea behind IMPACT Silver Corp and Apollo Silver Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.