Correlation Between GCM Mining and SilverCrest Metals

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

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

Diversification Opportunities for GCM Mining and SilverCrest Metals

-0.01

Correlation Coefficient

GCM Mining  SilverCrest Metals

Good diversification

The 3 months correlation between GCM and SilverCrest is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding GCM Mining Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals and GCM 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 GCM Mining Corp are associated (or correlated) with SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of GCM Mining i.e., GCM Mining and SilverCrest Metals go up and down completely randomly.

Pair Corralation between GCM Mining and SilverCrest Metals

If you would invest  259.00  in GCM Mining Corp on October 8, 2024 and sell it today you would earn a total of  0.00  from holding GCM Mining Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

GCM Mining Corp  vs.  SilverCrest Metals

GCM Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

SilverCrest Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GCM Mining and SilverCrest Metals

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

The idea behind GCM Mining Corp and SilverCrest Metals 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..