Correlation Between Fortuna Silver and Moneta Gold

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

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

Diversification Opportunities for Fortuna Silver and Moneta Gold

-0.09

Correlation Coefficient

Fortuna Silver  Moneta Gold

Good diversification

The 3 months correlation between Fortuna and Moneta is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Moneta Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneta Gold and Fortuna 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 Fortuna Silver Mines are associated (or correlated) with Moneta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneta Gold has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Moneta Gold go up and down completely randomly.

Pair Corralation between Fortuna Silver and Moneta Gold

If you would invest  430.00  in Fortuna Silver Mines on September 5, 2024 and sell it today you would earn a total of  67.00  from holding Fortuna Silver Mines or generate 15.58% return on investment over 90 days.

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

Fortuna Silver Mines  vs.  Moneta Gold

Fortuna Silver Mines

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fortuna Silver Mines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Fortuna Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Moneta Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moneta Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Moneta Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fortuna Silver and Moneta Gold

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

The idea behind Fortuna Silver Mines and Moneta Gold 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.