Correlation Between Fortuna Silver and Nocera

Can any of the company-specific risk be diversified away by investing in both Fortuna Silver and Nocera 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 Nocera 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 Nocera Inc, you can compare the effects of market volatilities on Fortuna Silver and Nocera 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 Nocera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortuna Silver and Nocera.

Diversification Opportunities for Fortuna Silver and Nocera

0.14

Correlation Coefficient

Fortuna Silver  Nocera

Average diversification

The 3 months correlation between Fortuna and Nocera is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Nocera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nocera Inc 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 Nocera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nocera Inc has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Nocera go up and down completely randomly.

Pair Corralation between Fortuna Silver and Nocera

Considering the 90-day investment horizon Fortuna Silver Mines is expected to generate 0.66 times more return on investment than Nocera. However, Fortuna Silver Mines is 1.5 times less risky than Nocera. It trades about 0.18 of its potential returns per unit of risk. Nocera Inc is currently generating about 0.01 per unit of risk. If you would invest  430.00  in Fortuna Silver Mines on January 16, 2025 and sell it today you would earn a total of  216.00  from holding Fortuna Silver Mines or generate 50.23% return on investment over 90 days.

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

Fortuna Silver Mines  vs.  Nocera Inc

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 14 (%) 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.

Nocera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nocera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nocera is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fortuna Silver and Nocera

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

The idea behind Fortuna Silver Mines and Nocera Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.