Correlation Between Silver Bear and Zedcor Energy

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

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

Diversification Opportunities for Silver Bear and Zedcor Energy

0.0

Correlation Coefficient

Silver Bear  Zedcor Energy

Pay attention - limited upside

The 3 months correlation between Silver and Zedcor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bear Resources and Zedcor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedcor Energy and Silver Bear 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 Bear Resources are associated (or correlated) with Zedcor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedcor Energy has no effect on the direction of Silver Bear i.e., Silver Bear and Zedcor Energy go up and down completely randomly.

Pair Corralation between Silver Bear and Zedcor Energy

If you would invest  83.00  in Zedcor Energy on February 20, 2024 and sell it today you would earn a total of  38.00  from holding Zedcor Energy or generate 45.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Silver Bear Resources  vs.  Zedcor Energy

Silver Bear Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Bear Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Silver Bear is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Zedcor Energy

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Energy are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Zedcor Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Bear and Zedcor Energy

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

The idea behind Silver Bear Resources and Zedcor Energy 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.