Correlation Between Invesco Physical and Fortuna Silver

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

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

Diversification Opportunities for Invesco Physical and Fortuna Silver

0.28

Correlation Coefficient

Invesco Physical  Fortuna Silver

Modest diversification

The 3 months correlation between Invesco and Fortuna is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Silver and Fortuna Silver Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortuna Silver Mines and Invesco Physical 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 Invesco Physical Silver are associated (or correlated) with Fortuna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortuna Silver Mines has no effect on the direction of Invesco Physical i.e., Invesco Physical and Fortuna Silver go up and down completely randomly.

Pair Corralation between Invesco Physical and Fortuna Silver

Assuming the 90 days trading horizon Invesco Physical Silver is expected to under-perform the Fortuna Silver. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Physical Silver is 1.41 times less risky than Fortuna Silver. The stock trades about -0.17 of its potential returns per unit of risk. The Fortuna Silver Mines is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  650.00  in Fortuna Silver Mines on October 11, 2024 and sell it today you would lose (8.00) from holding Fortuna Silver Mines or give up 1.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	42.11%
Values	Daily Returns

Invesco Physical Silver  vs.  Fortuna Silver Mines

Invesco Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Invesco Physical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Fortuna Silver Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortuna Silver Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fortuna Silver is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco Physical and Fortuna Silver

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

The idea behind Invesco Physical Silver and Fortuna Silver Mines 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.