Correlation Between Silver Elephant and Commerce Resources

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

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

Diversification Opportunities for Silver Elephant and Commerce Resources

0.76

Correlation Coefficient

Silver Elephant  Commerce Resources

Poor diversification

The 3 months correlation between Silver and Commerce is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Silver Elephant Mining and Commerce Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Resources Corp and Silver Elephant 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 Silver Elephant Mining are associated (or correlated) with Commerce Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Resources Corp has no effect on the direction of Silver Elephant i.e., Silver Elephant and Commerce Resources go up and down completely randomly.

Pair Corralation between Silver Elephant and Commerce Resources

Assuming the 90 days horizon Silver Elephant Mining is expected to generate 0.87 times more return on investment than Commerce Resources. However, Silver Elephant Mining is 1.16 times less risky than Commerce Resources. It trades about 0.05 of its potential returns per unit of risk. Commerce Resources Corp is currently generating about 0.01 per unit of risk. If you would invest  30.00  in Silver Elephant Mining on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Silver Elephant Mining or generate 0.0% return on investment over 90 days.

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

Silver Elephant Mining  vs.  Commerce Resources Corp

Silver Elephant Mining

Risk-Adjusted Performance

3 of 100

Insignificant

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

Commerce Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commerce Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Commerce Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Silver Elephant and Commerce Resources

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

The idea behind Silver Elephant Mining and Commerce 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.