Correlation Between Polymetal International and AbraSilver Resource

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

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

Diversification Opportunities for Polymetal International and AbraSilver Resource

-0.39

Correlation Coefficient

Polymetal International  AbraSilver Resource

Very good diversification

The 3 months correlation between Polymetal and AbraSilver is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Polymetal International PLC and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp and Polymetal International 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 Polymetal International PLC are associated (or correlated) with AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of Polymetal International i.e., Polymetal International and AbraSilver Resource go up and down completely randomly.

Pair Corralation between Polymetal International and AbraSilver Resource

If you would invest  163.00  in AbraSilver Resource Corp on September 2, 2024 and sell it today you would earn a total of  33.00  from holding AbraSilver Resource Corp or generate 20.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Polymetal International PLC  vs.  AbraSilver Resource Corp

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.

AbraSilver Resource Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AbraSilver Resource Corp are ranked lower than 8 (%) 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.

Pair Trading with Polymetal International and AbraSilver Resource

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

The idea behind Polymetal International PLC and AbraSilver Resource Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.