Correlation Between IShares Silver and Summa Silver

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

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

Diversification Opportunities for IShares Silver and Summa Silver

0.51

Correlation Coefficient

IShares Silver  Summa Silver

Very weak diversification

The 3 months correlation between IShares and Summa is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver Corp and IShares Silver 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 iShares Silver Trust are associated (or correlated) with Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of IShares Silver i.e., IShares Silver and Summa Silver go up and down completely randomly.

Pair Corralation between IShares Silver and Summa Silver

Considering the 90-day investment horizon iShares Silver Trust is expected to generate 0.42 times more return on investment than Summa Silver. However, iShares Silver Trust is 2.37 times less risky than Summa Silver. It trades about 0.22 of its potential returns per unit of risk. Summa Silver Corp is currently generating about 0.02 per unit of risk. If you would invest  2,275  in iShares Silver Trust on February 27, 2024 and sell it today you would earn a total of  499.00  from holding iShares Silver Trust or generate 21.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

iShares Silver Trust  vs.  Summa Silver Corp

iShares Silver Trust

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Silver Trust are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, IShares Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Summa Silver Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Summa Silver Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Summa Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Silver and Summa Silver

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

The idea behind iShares Silver Trust and Summa 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.