Correlation Between SilverCrest Metals and Clifton Mining

Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals and Clifton Mining 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 SilverCrest Metals and Clifton Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SilverCrest Metals and Clifton Mining Co, you can compare the effects of market volatilities on SilverCrest Metals and Clifton Mining 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 SilverCrest Metals with a short position of Clifton Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and Clifton Mining.

Diversification Opportunities for SilverCrest Metals and Clifton Mining

0.09

Correlation Coefficient

SilverCrest Metals  Clifton Mining

Significant diversification

The 3 months correlation between SilverCrest and Clifton is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals and Clifton Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clifton Mining and SilverCrest Metals 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 SilverCrest Metals are associated (or correlated) with Clifton Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clifton Mining has no effect on the direction of SilverCrest Metals i.e., SilverCrest Metals and Clifton Mining go up and down completely randomly.

Pair Corralation between SilverCrest Metals and Clifton Mining

Given the investment horizon of 90 days SilverCrest Metals is expected to generate 2.31 times less return on investment than Clifton Mining. But when comparing it to its historical volatility, SilverCrest Metals is 3.2 times less risky than Clifton Mining. It trades about 0.04 of its potential returns per unit of risk. Clifton Mining Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Clifton Mining Co on October 11, 2024 and sell it today you would lose (8.20) from holding Clifton Mining Co or give up 63.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SilverCrest Metals  vs.  Clifton Mining Co

SilverCrest Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SilverCrest Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, SilverCrest Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Clifton Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SilverCrest Metals and Clifton Mining

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

The idea behind SilverCrest Metals and Clifton Mining Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..