Correlation Between AbraSilver Resource and Polymetal International

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

By analyzing existing cross correlation between AbraSilver Resource Corp and Polymetal International PLC, you can compare the effects of market volatilities on AbraSilver Resource and Polymetal International 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 AbraSilver Resource with a short position of Polymetal International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbraSilver Resource and Polymetal International.

Diversification Opportunities for AbraSilver Resource and Polymetal International

-0.42

Correlation Coefficient

AbraSilver Resource  Polymetal International

Very good diversification

The 3 months correlation between AbraSilver and Polymetal is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AbraSilver Resource Corp and Polymetal International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polymetal International and AbraSilver Resource 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 AbraSilver Resource Corp are associated (or correlated) with Polymetal International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polymetal International has no effect on the direction of AbraSilver Resource i.e., AbraSilver Resource and Polymetal International go up and down completely randomly.

Pair Corralation between AbraSilver Resource and Polymetal International

If you would invest  163.00  in AbraSilver Resource Corp on August 31, 2024 and sell it today you would earn a total of  30.00  from holding AbraSilver Resource Corp or generate 18.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

AbraSilver Resource Corp  vs.  Polymetal International PLC

AbraSilver Resource Corp

Risk-Adjusted Performance

7 of 100

OK

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

Polymetal International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polymetal International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Polymetal International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AbraSilver Resource and Polymetal International

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

The idea behind AbraSilver Resource Corp and Polymetal International PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.