Correlation Between Fortuna Silver and Concord Medical

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

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

Diversification Opportunities for Fortuna Silver and Concord Medical

-0.55

Correlation Coefficient

Fortuna Silver  Concord Medical

Excellent diversification

The 3 months correlation between Fortuna and Concord is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Concord Medical Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Medical Services and Fortuna 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 Fortuna Silver Mines are associated (or correlated) with Concord Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Medical Services has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Concord Medical go up and down completely randomly.

Pair Corralation between Fortuna Silver and Concord Medical

Considering the 90-day investment horizon Fortuna Silver Mines is expected to generate 0.62 times more return on investment than Concord Medical. However, Fortuna Silver Mines is 1.61 times less risky than Concord Medical. It trades about 0.14 of its potential returns per unit of risk. Concord Medical Services is currently generating about 0.08 per unit of risk. If you would invest  451.00  in Fortuna Silver Mines on January 28, 2025 and sell it today you would earn a total of  155.00  from holding Fortuna Silver Mines or generate 34.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fortuna Silver Mines  vs.  Concord Medical Services

Fortuna Silver Mines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fortuna Silver Mines are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fortuna Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Concord Medical Services

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Concord Medical Services are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Concord Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fortuna Silver and Concord Medical

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

The idea behind Fortuna Silver Mines and Concord Medical Services 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.