Correlation Between Guanajuato Silver and Silver Storm

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

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

Diversification Opportunities for Guanajuato Silver and Silver Storm

0.5

Correlation Coefficient

Guanajuato Silver  Silver Storm

Very weak diversification

The 3 months correlation between Guanajuato and Silver is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and Silver Storm Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Storm Mining and Guanajuato 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 Guanajuato Silver are associated (or correlated) with Silver Storm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Storm Mining has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and Silver Storm go up and down completely randomly.

Pair Corralation between Guanajuato Silver and Silver Storm

Assuming the 90 days trading horizon Guanajuato Silver is expected to generate 0.69 times more return on investment than Silver Storm. However, Guanajuato Silver is 1.44 times less risky than Silver Storm. It trades about 0.17 of its potential returns per unit of risk. Silver Storm Mining is currently generating about 0.09 per unit of risk. If you would invest  17.00  in Guanajuato Silver on May 7, 2025 and sell it today you would earn a total of  11.00  from holding Guanajuato Silver or generate 64.71% return on investment over 90 days.

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

Guanajuato Silver  vs.  Silver Storm Mining

Guanajuato Silver

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guanajuato Silver are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Guanajuato Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Silver Storm Mining

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Storm Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Silver Storm showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guanajuato Silver and Silver Storm

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

The idea behind Guanajuato Silver and Silver Storm Mining 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.