Correlation Between Southern Silver and Gatos Silver

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

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

Diversification Opportunities for Southern Silver and Gatos Silver

0.0

Correlation Coefficient

Southern Silver  Gatos Silver

Pay attention - limited upside

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

Pair Corralation between Southern Silver and Gatos Silver

If you would invest  15.00  in Southern Silver Exploration on December 1, 2024 and sell it today you would earn a total of  0.00  from holding Southern Silver Exploration or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Southern Silver Exploration  vs.  Gatos Silver

Southern Silver Expl

Risk-Adjusted Performance

Weak

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

Gatos Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gatos Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gatos Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Southern Silver and Gatos Silver

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

The idea behind Southern Silver Exploration and Gatos Silver 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.