Correlation Between Silver Grail and Abcourt Mines

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

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

Diversification Opportunities for Silver Grail and Abcourt Mines

0.55

Correlation Coefficient

Silver Grail  Abcourt Mines

Very weak diversification

The 3 months correlation between Silver and Abcourt is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Silver Grail Resources and Abcourt Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcourt Mines and Silver Grail 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 Grail Resources are associated (or correlated) with Abcourt Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcourt Mines has no effect on the direction of Silver Grail i.e., Silver Grail and Abcourt Mines go up and down completely randomly.

Pair Corralation between Silver Grail and Abcourt Mines

Assuming the 90 days horizon Silver Grail is expected to generate 6.93 times less return on investment than Abcourt Mines. But when comparing it to its historical volatility, Silver Grail Resources is 2.76 times less risky than Abcourt Mines. It trades about 0.02 of its potential returns per unit of risk. Abcourt Mines is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Abcourt Mines on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Abcourt Mines or generate 0.0% return on investment over 90 days.

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

Silver Grail Resources  vs.  Abcourt Mines

Silver Grail Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Grail Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Silver Grail is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Abcourt Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abcourt Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Silver Grail and Abcourt Mines

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

The idea behind Silver Grail Resources and Abcourt 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.