Correlation Between Mantaro Silver and Equity Metals

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

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

Diversification Opportunities for Mantaro Silver and Equity Metals

-0.19

Correlation Coefficient

Mantaro Silver  Equity Metals

Good diversification

The 3 months correlation between Mantaro and Equity is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mantaro Silver Corp and Equity Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Metals and Mantaro 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 Mantaro Silver Corp are associated (or correlated) with Equity Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Metals has no effect on the direction of Mantaro Silver i.e., Mantaro Silver and Equity Metals go up and down completely randomly.

Pair Corralation between Mantaro Silver and Equity Metals

Assuming the 90 days horizon Mantaro Silver Corp is expected to under-perform the Equity Metals. In addition to that, Mantaro Silver is 1.31 times more volatile than Equity Metals. It trades about -0.06 of its total potential returns per unit of risk. Equity Metals is currently generating about 0.02 per unit of volatility. If you would invest  14.00  in Equity Metals on September 2, 2024 and sell it today you would lose (1.00) from holding Equity Metals or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Mantaro Silver Corp  vs.  Equity Metals

Mantaro Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mantaro Silver Corp 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 basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Equity Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Equity Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mantaro Silver and Equity Metals

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

The idea behind Mantaro Silver Corp and Equity Metals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.