Correlation Between Silver Bear and Royal Helium

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

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

Diversification Opportunities for Silver Bear and Royal Helium

0.0

Correlation Coefficient

Silver Bear  Royal Helium

Pay attention - limited upside

The 3 months correlation between Silver and Royal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bear Resources and Royal Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Helium and Silver Bear 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 Silver Bear Resources are associated (or correlated) with Royal Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Helium has no effect on the direction of Silver Bear i.e., Silver Bear and Royal Helium go up and down completely randomly.

Pair Corralation between Silver Bear and Royal Helium

If you would invest  3.00  in Royal Helium on December 21, 2024 and sell it today you would lose (1.00) from holding Royal Helium or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Silver Bear Resources  vs.  Royal Helium

Silver Bear Resources

Risk-Adjusted Performance

Very Weak

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

Royal Helium

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Royal Helium are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Royal Helium showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Bear and Royal Helium

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

The idea behind Silver Bear Resources and Royal Helium 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.