Correlation Between Excellon Resources and Americas Silver

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

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

Diversification Opportunities for Excellon Resources and Americas Silver

0.21

Correlation Coefficient

Excellon Resources  Americas Silver

Modest diversification

The 3 months correlation between Excellon and Americas is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Excellon Resources and Americas Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Silver Corp and Excellon Resources 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 Excellon Resources are associated (or correlated) with Americas Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Silver Corp has no effect on the direction of Excellon Resources i.e., Excellon Resources and Americas Silver go up and down completely randomly.

Pair Corralation between Excellon Resources and Americas Silver

Assuming the 90 days trading horizon Excellon Resources is expected to generate 5.28 times less return on investment than Americas Silver. In addition to that, Excellon Resources is 1.24 times more volatile than Americas Silver Corp. It trades about 0.02 of its total potential returns per unit of risk. Americas Silver Corp is currently generating about 0.16 per unit of volatility. If you would invest  33.00  in Americas Silver Corp on September 4, 2024 and sell it today you would earn a total of  22.00  from holding Americas Silver Corp or generate 66.67% return on investment over 90 days.

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

Excellon Resources  vs.  Americas Silver Corp

Excellon Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Excellon Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Excellon Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Americas Silver Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Americas Silver Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Americas Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Excellon Resources and Americas Silver

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

The idea behind Excellon Resources and Americas Silver 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.