Correlation Between Guanajuato Silver and Cartier Resources

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

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

Diversification Opportunities for Guanajuato Silver and Cartier Resources

0.54

Correlation Coefficient

Guanajuato Silver  Cartier Resources

Very weak diversification

The 3 months correlation between Guanajuato and Cartier is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guanajuato Silver and Cartier Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartier Resources 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 Cartier Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartier Resources has no effect on the direction of Guanajuato Silver i.e., Guanajuato Silver and Cartier Resources go up and down completely randomly.

Pair Corralation between Guanajuato Silver and Cartier Resources

Assuming the 90 days horizon Guanajuato Silver is expected to generate 1.21 times more return on investment than Cartier Resources. However, Guanajuato Silver is 1.21 times more volatile than Cartier Resources. It trades about 0.15 of its potential returns per unit of risk. Cartier Resources is currently generating about 0.04 per unit of risk. If you would invest  13.00  in Guanajuato Silver on May 6, 2025 and sell it today you would earn a total of  7.00  from holding Guanajuato Silver or generate 53.85% 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.  Cartier Resources

Guanajuato Silver

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guanajuato Silver are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Guanajuato Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Cartier Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cartier Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cartier Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guanajuato Silver and Cartier Resources

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

The idea behind Guanajuato Silver and Cartier Resources 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.