Correlation Between Prime Meridian and Kootenay Silver

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

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

Diversification Opportunities for Prime Meridian and Kootenay Silver

0.74

Correlation Coefficient

Prime Meridian  Kootenay Silver

Poor diversification

The 3 months correlation between Prime and Kootenay is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Prime Meridian Resources and Kootenay Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kootenay Silver and Prime Meridian 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 Prime Meridian Resources are associated (or correlated) with Kootenay Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kootenay Silver has no effect on the direction of Prime Meridian i.e., Prime Meridian and Kootenay Silver go up and down completely randomly.

Pair Corralation between Prime Meridian and Kootenay Silver

If you would invest  62.00  in Kootenay Silver on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Kootenay Silver or generate 17.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.0%
Values	Daily Returns

Prime Meridian Resources  vs.  Kootenay Silver

Prime Meridian Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prime Meridian Resources 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.

Kootenay Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kootenay 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.

Pair Trading with Prime Meridian and Kootenay Silver

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

The idea behind Prime Meridian Resources and Kootenay 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.