Correlation Between Silver Grail and Klondike Silver

Can any of the company-specific risk be diversified away by investing in both Silver Grail and Klondike 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 Silver Grail and Klondike Silver 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 Klondike Silver Corp, you can compare the effects of market volatilities on Silver Grail and Klondike 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 Silver Grail with a short position of Klondike Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Grail and Klondike Silver.

Diversification Opportunities for Silver Grail and Klondike Silver

0.72

Correlation Coefficient

Silver Grail  Klondike Silver

Poor diversification

The 3 months correlation between Silver and Klondike is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Silver Grail Resources and Klondike Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Silver Corp 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 Klondike Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Silver Corp has no effect on the direction of Silver Grail i.e., Silver Grail and Klondike Silver go up and down completely randomly.

Pair Corralation between Silver Grail and Klondike Silver

Assuming the 90 days horizon Silver Grail Resources is expected to generate 0.41 times more return on investment than Klondike Silver. However, Silver Grail Resources is 2.41 times less risky than Klondike Silver. It trades about -0.09 of its potential returns per unit of risk. Klondike Silver Corp is currently generating about -0.08 per unit of risk. If you would invest  10.00  in Silver Grail Resources on October 22, 2024 and sell it today you would lose (3.00) from holding Silver Grail Resources or give up 30.0% of portfolio value over 90 days.

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

Silver Grail Resources  vs.  Klondike Silver Corp

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 weak 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.

Klondike Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Klondike Silver Corp 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 Klondike Silver

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

The idea behind Silver Grail Resources and Klondike Silver Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.