Correlation Between Origen Resources and Silver Wolf

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

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

Diversification Opportunities for Origen Resources and Silver Wolf

0.54

Correlation Coefficient

Origen Resources  Silver Wolf

Very weak diversification

The 3 months correlation between Origen and Silver is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Origen Resources and Silver Wolf Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Wolf Exploration and Origen Resources 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 Origen Resources are associated (or correlated) with Silver Wolf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Wolf Exploration has no effect on the direction of Origen Resources i.e., Origen Resources and Silver Wolf go up and down completely randomly.

Pair Corralation between Origen Resources and Silver Wolf

Assuming the 90 days horizon Origen Resources is expected to under-perform the Silver Wolf. But the pink sheet apears to be less risky and, when comparing its historical volatility, Origen Resources is 2.34 times less risky than Silver Wolf. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Silver Wolf Exploration is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Silver Wolf Exploration on November 29, 2024 and sell it today you would lose (5.97) from holding Silver Wolf Exploration or give up 49.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Origen Resources  vs.  Silver Wolf Exploration

Origen Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origen Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Silver Wolf Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver Wolf Exploration 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Origen Resources and Silver Wolf

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

The idea behind Origen Resources and Silver Wolf Exploration 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.