Correlation Between Canada Silver and Golden Dawn

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

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

Diversification Opportunities for Canada Silver and Golden Dawn

0.32

Correlation Coefficient

Canada Silver  Golden Dawn

Weak diversification

The 3 months correlation between Canada and Golden is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Canada Silver Cobalt and Golden Dawn Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Dawn Minerals and Canada 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 Canada Silver Cobalt are associated (or correlated) with Golden Dawn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Dawn Minerals has no effect on the direction of Canada Silver i.e., Canada Silver and Golden Dawn go up and down completely randomly.

Pair Corralation between Canada Silver and Golden Dawn

Assuming the 90 days horizon Canada Silver Cobalt is expected to generate 7.6 times more return on investment than Golden Dawn. However, Canada Silver is 7.6 times more volatile than Golden Dawn Minerals. It trades about 0.1 of its potential returns per unit of risk. Golden Dawn Minerals is currently generating about 0.02 per unit of risk. If you would invest  48.00  in Canada Silver Cobalt on September 30, 2024 and sell it today you would lose (38.00) from holding Canada Silver Cobalt or give up 79.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.53%
Values	Daily Returns

Canada Silver Cobalt  vs.  Golden Dawn Minerals

Canada Silver Cobalt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Silver Cobalt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Golden Dawn Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Dawn Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Canada Silver and Golden Dawn

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

The idea behind Canada Silver Cobalt and Golden Dawn Minerals 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 CEOs Directory module to screen CEOs from public companies around the world.