Correlation Between Silver Wolf and Clifton Mining

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

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

Diversification Opportunities for Silver Wolf and Clifton Mining

0.42

Correlation Coefficient

Silver Wolf  Clifton Mining

Very weak diversification

The 3 months correlation between Silver and Clifton is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Silver Wolf Exploration and Clifton Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clifton Mining and Silver Wolf 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 Wolf Exploration are associated (or correlated) with Clifton Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clifton Mining has no effect on the direction of Silver Wolf i.e., Silver Wolf and Clifton Mining go up and down completely randomly.

Pair Corralation between Silver Wolf and Clifton Mining

Assuming the 90 days horizon Silver Wolf Exploration is expected to generate 1.11 times more return on investment than Clifton Mining. However, Silver Wolf is 1.11 times more volatile than Clifton Mining Co. It trades about 0.04 of its potential returns per unit of risk. Clifton Mining Co is currently generating about 0.02 per unit of risk. If you would invest  10.00  in Silver Wolf Exploration on October 9, 2024 and sell it today you would lose (0.81) from holding Silver Wolf Exploration or give up 8.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

Silver Wolf Exploration  vs.  Clifton Mining Co

Silver Wolf Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Wolf Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Silver Wolf is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Clifton Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clifton Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Silver Wolf and Clifton Mining

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

The idea behind Silver Wolf Exploration and Clifton Mining Co 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.