Correlation Between SolGold PLC and Silver Bull

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

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

Diversification Opportunities for SolGold PLC and Silver Bull

0.56

Correlation Coefficient

SolGold PLC  Silver Bull

Very weak diversification

The 3 months correlation between SolGold and Silver is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SolGold PLC and Silver Bull Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bull Resources and SolGold PLC 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 SolGold PLC are associated (or correlated) with Silver Bull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bull Resources has no effect on the direction of SolGold PLC i.e., SolGold PLC and Silver Bull go up and down completely randomly.

Pair Corralation between SolGold PLC and Silver Bull

Assuming the 90 days trading horizon SolGold PLC is expected to under-perform the Silver Bull. But the stock apears to be less risky and, when comparing its historical volatility, SolGold PLC is 1.17 times less risky than Silver Bull. The stock trades about -0.2 of its potential returns per unit of risk. The Silver Bull Resources is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Silver Bull Resources on September 23, 2024 and sell it today you would lose (1.00) from holding Silver Bull Resources or give up 7.69% of portfolio value over 90 days.

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

SolGold PLC  vs.  Silver Bull Resources

SolGold PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SolGold PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Silver Bull Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Bull Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with SolGold PLC and Silver Bull

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

The idea behind SolGold PLC and Silver Bull Resources 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.