Correlation Between SilverCrest Metals and Global X

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

By analyzing existing cross correlation between SilverCrest Metals and Global X Silver, you can compare the effects of market volatilities on SilverCrest Metals and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and Global X.

Diversification Opportunities for SilverCrest Metals and Global X

0.81

Correlation Coefficient

SilverCrest Metals  Global X

Very poor diversification

The 3 months correlation between SilverCrest and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals and Global X Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Silver 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Silver has no effect on the direction of SilverCrest Metals i.e., SilverCrest Metals and Global X go up and down completely randomly.

Pair Corralation between SilverCrest Metals and Global X

Given the investment horizon of 90 days SilverCrest Metals is expected to generate 1.64 times more return on investment than Global X. However, SilverCrest Metals is 1.64 times more volatile than Global X Silver. It trades about -0.04 of its potential returns per unit of risk. Global X Silver is currently generating about -0.1 per unit of risk. If you would invest  1,154  in SilverCrest Metals on October 23, 2024 and sell it today you would lose (142.00) from holding SilverCrest Metals or give up 12.31% of portfolio value over 90 days.

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

SilverCrest Metals  vs.  Global X Silver

SilverCrest Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SilverCrest Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's essential indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Global X Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Etf's forward indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with SilverCrest Metals and Global X

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

The idea behind SilverCrest Metals and Global X 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.