Correlation Between SSR Mining and Fortuna Silver

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

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

Diversification Opportunities for SSR Mining and Fortuna Silver

0.65

Correlation Coefficient

SSR Mining  Fortuna Silver

Poor diversification

The 3 months correlation between SSR and Fortuna is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining 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 SSR Mining 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 SSR Mining 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 SSR Mining i.e., SSR Mining and Fortuna Silver go up and down completely randomly.

Pair Corralation between SSR Mining and Fortuna Silver

Assuming the 90 days trading horizon SSR Mining is expected to generate 0.9 times more return on investment than Fortuna Silver. However, SSR Mining is 1.11 times less risky than Fortuna Silver. It trades about 0.24 of its potential returns per unit of risk. Fortuna Silver Mines is currently generating about 0.18 per unit of risk. If you would invest  984.00  in SSR Mining on December 30, 2024 and sell it today you would earn a total of  574.00  from holding SSR Mining or generate 58.33% return on investment over 90 days.

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

SSR Mining  vs.  Fortuna Silver Mines

SSR Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SSR Mining are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, SSR Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Fortuna Silver Mines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortuna Silver Mines are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Fortuna Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSR Mining and Fortuna Silver

The main advantage of trading using opposite SSR Mining and Fortuna Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSR Mining 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 SSR Mining 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.