Correlation Between IMPACT Silver and Santacruz Silv

Can any of the company-specific risk be diversified away by investing in both IMPACT Silver and Santacruz Silv 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 Santacruz Silv 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 Santacruz Silv, you can compare the effects of market volatilities on IMPACT Silver and Santacruz Silv 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 Santacruz Silv. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMPACT Silver and Santacruz Silv.

Diversification Opportunities for IMPACT Silver and Santacruz Silv

-0.48

Correlation Coefficient

IMPACT Silver  Santacruz Silv

Very good diversification

The 3 months correlation between IMPACT and Santacruz is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding IMPACT Silver Corp and Santacruz Silv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santacruz Silv 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 Santacruz Silv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santacruz Silv has no effect on the direction of IMPACT Silver i.e., IMPACT Silver and Santacruz Silv go up and down completely randomly.

Pair Corralation between IMPACT Silver and Santacruz Silv

Assuming the 90 days horizon IMPACT Silver is expected to generate 4.35 times less return on investment than Santacruz Silv. But when comparing it to its historical volatility, IMPACT Silver Corp is 1.13 times less risky than Santacruz Silv. It trades about 0.02 of its potential returns per unit of risk. Santacruz Silv is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Santacruz Silv on October 25, 2024 and sell it today you would earn a total of  7.00  from holding Santacruz Silv or generate 28.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.28%
Values	Daily Returns

IMPACT Silver Corp  vs.  Santacruz Silv

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.

Santacruz Silv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santacruz Silv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Santacruz Silv is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IMPACT Silver and Santacruz Silv

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

The idea behind IMPACT Silver Corp and Santacruz Silv 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.