Correlation Between Strikepoint Gold and Gatos Silver

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

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

Diversification Opportunities for Strikepoint Gold and Gatos Silver

0.47

Correlation Coefficient

Strikepoint Gold  Gatos Silver

Very weak diversification

The 3 months correlation between Strikepoint and Gatos is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Strikepoint Gold and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Strikepoint Gold 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 Strikepoint Gold are associated (or correlated) with Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Strikepoint Gold i.e., Strikepoint Gold and Gatos Silver go up and down completely randomly.

Pair Corralation between Strikepoint Gold and Gatos Silver

Assuming the 90 days horizon Strikepoint Gold is expected to under-perform the Gatos Silver. In addition to that, Strikepoint Gold is 2.93 times more volatile than Gatos Silver. It trades about -0.23 of its total potential returns per unit of risk. Gatos Silver is currently generating about 0.13 per unit of volatility. If you would invest  2,209  in Gatos Silver on September 13, 2024 and sell it today you would earn a total of  185.00  from holding Gatos Silver or generate 8.37% return on investment over 90 days.

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

Strikepoint Gold  vs.  Gatos Silver

Strikepoint Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strikepoint Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Strikepoint Gold is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gatos Silver

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gatos Silver are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Gatos Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strikepoint Gold and Gatos Silver

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

The idea behind Strikepoint Gold and Gatos Silver 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.