Correlation Between IMPACT Silver and Bald Eagle

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

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

Diversification Opportunities for IMPACT Silver and Bald Eagle

-0.17

Correlation Coefficient

IMPACT Silver  Bald Eagle

Good diversification

The 3 months correlation between IMPACT and Bald is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding IMPACT Silver Corp and Bald Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bald Eagle Gold and IMPACT 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 IMPACT Silver Corp are associated (or correlated) with Bald Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bald Eagle Gold has no effect on the direction of IMPACT Silver i.e., IMPACT Silver and Bald Eagle go up and down completely randomly.

Pair Corralation between IMPACT Silver and Bald Eagle

Assuming the 90 days horizon IMPACT Silver Corp is expected to generate 1.37 times more return on investment than Bald Eagle. However, IMPACT Silver is 1.37 times more volatile than Bald Eagle Gold. It trades about 0.05 of its potential returns per unit of risk. Bald Eagle Gold is currently generating about -0.06 per unit of risk. If you would invest  15.00  in IMPACT Silver Corp on August 30, 2024 and sell it today you would earn a total of  1.00  from holding IMPACT Silver Corp or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

IMPACT Silver Corp  vs.  Bald Eagle Gold

IMPACT Silver Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IMPACT Silver Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, IMPACT Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Bald Eagle Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bald Eagle Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IMPACT Silver and Bald Eagle

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

The idea behind IMPACT Silver Corp and Bald Eagle 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.