Correlation Between Gatos Silver and Integra Resources

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

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

Diversification Opportunities for Gatos Silver and Integra Resources

0.83

Correlation Coefficient

Gatos Silver  Integra Resources

Very poor diversification

The 3 months correlation between Gatos and Integra is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gatos Silver and Integra Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Resources Corp and Gatos 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 Gatos Silver are associated (or correlated) with Integra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Resources Corp has no effect on the direction of Gatos Silver i.e., Gatos Silver and Integra Resources go up and down completely randomly.

Pair Corralation between Gatos Silver and Integra Resources

Given the investment horizon of 90 days Gatos Silver is expected to generate 0.84 times more return on investment than Integra Resources. However, Gatos Silver is 1.19 times less risky than Integra Resources. It trades about -0.26 of its potential returns per unit of risk. Integra Resources Corp is currently generating about -0.24 per unit of risk. If you would invest  1,809  in Gatos Silver on September 2, 2024 and sell it today you would lose (263.00) from holding Gatos Silver or give up 14.54% of portfolio value over 90 days.

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

Gatos Silver  vs.  Integra Resources Corp

Gatos Silver

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gatos Silver are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Gatos Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Integra Resources Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Resources Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Integra Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gatos Silver and Integra Resources

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

The idea behind Gatos Silver and Integra Resources 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.