Correlation Between Silver Tiger and Scottie Resources

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

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

Diversification Opportunities for Silver Tiger and Scottie Resources

0.0

Correlation Coefficient

Silver Tiger  Scottie Resources

Pay attention - limited upside

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

Pair Corralation between Silver Tiger and Scottie Resources

Assuming the 90 days horizon Silver Tiger is expected to generate 49.62 times less return on investment than Scottie Resources. But when comparing it to its historical volatility, Silver Tiger Metals is 15.86 times less risky than Scottie Resources. It trades about 0.05 of its potential returns per unit of risk. Scottie Resources Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Scottie Resources Corp on August 31, 2024 and sell it today you would lose (2.00) from holding Scottie Resources Corp or give up 14.29% of portfolio value over 90 days.

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

Silver Tiger Metals  vs.  Scottie Resources Corp

Silver Tiger Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Tiger Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Silver Tiger reported solid returns over the last few months and may actually be approaching a breakup point.

Scottie Resources Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scottie Resources Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Scottie Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Tiger and Scottie Resources

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

The idea behind Silver Tiger Metals and Scottie Resources Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.