Correlation Between Silver Bull and Titan Mining

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

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

Diversification Opportunities for Silver Bull and Titan Mining

-0.48

Correlation Coefficient

Silver Bull  Titan Mining

Very good diversification

The 3 months correlation between Silver and Titan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bull Resources and Titan Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Mining Corp and Silver Bull 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 Bull Resources are associated (or correlated) with Titan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Mining Corp has no effect on the direction of Silver Bull i.e., Silver Bull and Titan Mining go up and down completely randomly.

Pair Corralation between Silver Bull and Titan Mining

Assuming the 90 days trading horizon Silver Bull is expected to generate 3.49 times less return on investment than Titan Mining. But when comparing it to its historical volatility, Silver Bull Resources is 1.58 times less risky than Titan Mining. It trades about 0.02 of its potential returns per unit of risk. Titan Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Titan Mining Corp on September 23, 2024 and sell it today you would earn a total of  1.00  from holding Titan Mining Corp or generate 3.33% return on investment over 90 days.

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

Silver Bull Resources  vs.  Titan Mining Corp

Silver Bull Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Bull Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Titan Mining Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Mining Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Titan Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silver Bull and Titan Mining

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

The idea behind Silver Bull Resources and Titan Mining 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.