Correlation Between Americas Silver and Excellon Resources
Can any of the company-specific risk be diversified away by investing in both Americas Silver and Excellon Resources 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 Americas Silver and Excellon Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americas Silver Corp and Excellon Resources, you can compare the effects of market volatilities on Americas Silver and Excellon Resources 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 Americas Silver with a short position of Excellon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Silver and Excellon Resources.
Diversification Opportunities for Americas Silver and Excellon Resources
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Americas and Excellon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Americas Silver Corp and Excellon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellon Resources and Americas 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 Americas Silver Corp are associated (or correlated) with Excellon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellon Resources has no effect on the direction of Americas Silver i.e., Americas Silver and Excellon Resources go up and down completely randomly.
Pair Corralation between Americas Silver and Excellon Resources
Assuming the 90 days trading horizon Americas Silver Corp is expected to generate 1.01 times more return on investment than Excellon Resources. However, Americas Silver is 1.01 times more volatile than Excellon Resources. It trades about 0.26 of its potential returns per unit of risk. Excellon Resources is currently generating about -0.1 per unit of risk. If you would invest 36.00 in Americas Silver Corp on March 5, 2024 and sell it today you would earn a total of 11.00 from holding Americas Silver Corp or generate 30.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Americas Silver Corp vs. Excellon Resources
Performance |
Timeline |
Americas Silver Corp |
Excellon Resources |
Americas Silver and Excellon Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Americas Silver and Excellon Resources
The main advantage of trading using opposite Americas Silver and Excellon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Silver position performs unexpectedly, Excellon Resources 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 Excellon Resources will offset losses from the drop in Excellon Resources' long position.Americas Silver vs. BTU Metals Corp | Americas Silver vs. GoldOn Resources | Americas Silver vs. Kore Mining |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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