Correlation Between Mantaro Silver and Mexican Gold

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

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

Diversification Opportunities for Mantaro Silver and Mexican Gold

0.61

Correlation Coefficient

Mantaro Silver  Mexican Gold

Poor diversification

The 3 months correlation between Mantaro and Mexican is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mantaro Silver Corp and Mexican Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexican Gold Mining and Mantaro 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 Mantaro Silver Corp are associated (or correlated) with Mexican Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexican Gold Mining has no effect on the direction of Mantaro Silver i.e., Mantaro Silver and Mexican Gold go up and down completely randomly.

Pair Corralation between Mantaro Silver and Mexican Gold

Assuming the 90 days horizon Mantaro Silver is expected to generate 1.14 times less return on investment than Mexican Gold. But when comparing it to its historical volatility, Mantaro Silver Corp is 1.13 times less risky than Mexican Gold. It trades about 0.12 of its potential returns per unit of risk. Mexican Gold Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2.47  in Mexican Gold Mining on December 29, 2024 and sell it today you would earn a total of  1.53  from holding Mexican Gold Mining or generate 61.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Mantaro Silver Corp  vs.  Mexican Gold Mining

Mantaro Silver Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mantaro Silver Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mantaro Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Mexican Gold Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexican Gold Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Mexican Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mantaro Silver and Mexican Gold

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

The idea behind Mantaro Silver Corp and Mexican Gold 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.