Correlation Between Grande Portage and Silver Elephant

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

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

Diversification Opportunities for Grande Portage and Silver Elephant

0.59

Correlation Coefficient

Grande Portage  Silver Elephant

Very weak diversification

The 3 months correlation between Grande and Silver is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining and Grande Portage 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 Grande Portage Resources are associated (or correlated) with Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of Grande Portage i.e., Grande Portage and Silver Elephant go up and down completely randomly.

Pair Corralation between Grande Portage and Silver Elephant

Assuming the 90 days horizon Grande Portage is expected to generate 1.25 times less return on investment than Silver Elephant. In addition to that, Grande Portage is 1.1 times more volatile than Silver Elephant Mining. It trades about 0.02 of its total potential returns per unit of risk. Silver Elephant Mining is currently generating about 0.02 per unit of volatility. If you would invest  41.00  in Silver Elephant Mining on September 24, 2024 and sell it today you would lose (5.00) from holding Silver Elephant Mining or give up 12.2% of portfolio value over 90 days.

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

Grande Portage Resources  vs.  Silver Elephant Mining

Grande Portage Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grande Portage Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Silver Elephant Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Elephant Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Grande Portage and Silver Elephant

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

The idea behind Grande Portage Resources and Silver Elephant Mining 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.