Correlation Between Tarku Resources and Aftermath Silver

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

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

Diversification Opportunities for Tarku Resources and Aftermath Silver

-0.23

Correlation Coefficient

Tarku Resources  Aftermath Silver

Very good diversification

The 3 months correlation between Tarku and Aftermath is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tarku Resources and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver and Tarku Resources 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 Tarku Resources are associated (or correlated) with Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of Tarku Resources i.e., Tarku Resources and Aftermath Silver go up and down completely randomly.

Pair Corralation between Tarku Resources and Aftermath Silver

Assuming the 90 days horizon Tarku Resources is expected to generate 16.09 times less return on investment than Aftermath Silver. But when comparing it to its historical volatility, Tarku Resources is 1.18 times less risky than Aftermath Silver. It trades about 0.01 of its potential returns per unit of risk. Aftermath Silver is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Aftermath Silver on December 29, 2024 and sell it today you would earn a total of  11.00  from holding Aftermath Silver or generate 37.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Tarku Resources  vs.  Aftermath Silver

Tarku Resources

Risk-Adjusted Performance

Very Weak

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

Aftermath Silver

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Aftermath Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tarku Resources and Aftermath Silver

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

The idea behind Tarku Resources and Aftermath 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.