Correlation Between Mexus Gold and Gatos Silver

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

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

Diversification Opportunities for Mexus Gold and Gatos Silver

0.67

Correlation Coefficient

Mexus Gold  Gatos Silver

Poor diversification

The 3 months correlation between Mexus and Gatos is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mexus Gold Us and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Mexus Gold 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 Mexus Gold Us 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 Mexus Gold i.e., Mexus Gold and Gatos Silver go up and down completely randomly.

Pair Corralation between Mexus Gold and Gatos Silver

Given the investment horizon of 90 days Mexus Gold Us is expected to generate 11.78 times more return on investment than Gatos Silver. However, Mexus Gold is 11.78 times more volatile than Gatos Silver. It trades about 0.05 of its potential returns per unit of risk. Gatos Silver is currently generating about 0.08 per unit of risk. If you would invest  0.04  in Mexus Gold Us on September 26, 2024 and sell it today you would lose (0.03) from holding Mexus Gold Us or give up 75.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Mexus Gold Us  vs.  Gatos Silver

Mexus Gold Us

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexus Gold Us are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mexus Gold reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Mexus Gold and Gatos Silver

The main advantage of trading using opposite Mexus Gold and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mexus Gold 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 Mexus Gold Us 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.