Correlation Between Dolly Varden and AfriTin Mining

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

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

Diversification Opportunities for Dolly Varden and AfriTin Mining

-0.45

Correlation Coefficient

Dolly Varden  AfriTin Mining

Very good diversification

The 3 months correlation between Dolly and AfriTin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dolly Varden Silver and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining and Dolly Varden 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 Dolly Varden Silver are associated (or correlated) with AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Dolly Varden i.e., Dolly Varden and AfriTin Mining go up and down completely randomly.

Pair Corralation between Dolly Varden and AfriTin Mining

Assuming the 90 days trading horizon Dolly Varden Silver is expected to under-perform the AfriTin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Dolly Varden Silver is 1.33 times less risky than AfriTin Mining. The stock trades about -0.39 of its potential returns per unit of risk. The AfriTin Mining is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  230.00  in AfriTin Mining on September 24, 2024 and sell it today you would lose (7.00) from holding AfriTin Mining or give up 3.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	38.1%
Values	Daily Returns

Dolly Varden Silver  vs.  AfriTin Mining

Dolly Varden Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolly Varden Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

AfriTin Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AfriTin Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Dolly Varden and AfriTin Mining

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

The idea behind Dolly Varden Silver and AfriTin 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.