Correlation Between Aftermath Silver and Chalice Mining

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

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

Diversification Opportunities for Aftermath Silver and Chalice Mining

0.85

Correlation Coefficient

Aftermath Silver  Chalice Mining

Very poor diversification

The 3 months correlation between Aftermath and Chalice is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and Aftermath 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 Aftermath Silver are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Chalice Mining go up and down completely randomly.

Pair Corralation between Aftermath Silver and Chalice Mining

Assuming the 90 days horizon Aftermath Silver is expected to generate 0.94 times more return on investment than Chalice Mining. However, Aftermath Silver is 1.06 times less risky than Chalice Mining. It trades about 0.14 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about 0.09 per unit of risk. If you would invest  23.00  in Aftermath Silver on September 3, 2024 and sell it today you would earn a total of  12.00  from holding Aftermath Silver or generate 52.17% return on investment over 90 days.

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

Aftermath Silver  vs.  Chalice Mining Limited

Aftermath Silver

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Aftermath Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Chalice Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chalice Mining Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Chalice Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aftermath Silver and Chalice Mining

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

The idea behind Aftermath Silver and Chalice Mining Limited 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.