Correlation Between Kuya Silver and Gatos Silver

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

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

Diversification Opportunities for Kuya Silver and Gatos Silver

0.81

Correlation Coefficient

Kuya Silver  Gatos Silver

Very poor diversification

The 3 months correlation between Kuya and Gatos is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kuya Silver and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Kuya 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 Kuya Silver are associated (or correlated) with Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Kuya Silver i.e., Kuya Silver and Gatos Silver go up and down completely randomly.

Pair Corralation between Kuya Silver and Gatos Silver

Assuming the 90 days horizon Kuya Silver is expected to generate 1.48 times more return on investment than Gatos Silver. However, Kuya Silver is 1.48 times more volatile than Gatos Silver. It trades about 0.02 of its potential returns per unit of risk. Gatos Silver is currently generating about -0.11 per unit of risk. If you would invest  19.00  in Kuya Silver on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Kuya Silver or generate 0.0% return on investment over 90 days.

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

Kuya Silver  vs.  Gatos Silver

Kuya Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuya 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 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.

Gatos Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gatos Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kuya Silver and Gatos Silver

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

The idea behind Kuya Silver and Gatos 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.