Correlation Between Silver Spruce and AMG Advanced

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

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

Diversification Opportunities for Silver Spruce and AMG Advanced

-0.33

Correlation Coefficient

Silver Spruce  AMG Advanced

Very good diversification

The 3 months correlation between Silver and AMG is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Silver Spruce Resources and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Silver Spruce 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 Spruce Resources are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Silver Spruce i.e., Silver Spruce and AMG Advanced go up and down completely randomly.

Pair Corralation between Silver Spruce and AMG Advanced

Assuming the 90 days horizon Silver Spruce is expected to generate 1.47 times less return on investment than AMG Advanced. In addition to that, Silver Spruce is 2.8 times more volatile than AMG Advanced Metallurgical. It trades about 0.04 of its total potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about 0.15 per unit of volatility. If you would invest  1,405  in AMG Advanced Metallurgical on December 20, 2024 and sell it today you would earn a total of  656.00  from holding AMG Advanced Metallurgical or generate 46.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Silver Spruce Resources  vs.  AMG Advanced Metallurgical

Silver Spruce Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Spruce Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Silver Spruce reported solid returns over the last few months and may actually be approaching a breakup point.

AMG Advanced Metallu

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMG Advanced Metallurgical are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, AMG Advanced reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Spruce and AMG Advanced

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

The idea behind Silver Spruce Resources and AMG Advanced Metallurgical 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.