Correlation Between InPlay Oil and Silver Bear

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

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

Diversification Opportunities for InPlay Oil and Silver Bear

0.0

Correlation Coefficient

InPlay Oil  Silver Bear

Pay attention - limited upside

The 3 months correlation between InPlay and Silver is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Silver Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bear Resources and InPlay Oil 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 InPlay Oil Corp are associated (or correlated) with Silver Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bear Resources has no effect on the direction of InPlay Oil i.e., InPlay Oil and Silver Bear go up and down completely randomly.

Pair Corralation between InPlay Oil and Silver Bear

If you would invest  5.00  in Silver Bear Resources on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Silver Bear Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

InPlay Oil Corp  vs.  Silver Bear Resources

InPlay Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InPlay Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Silver Bear Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Bear Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Silver Bear is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with InPlay Oil and Silver Bear

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

The idea behind InPlay Oil Corp and Silver Bear Resources 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.