Correlation Between Santacruz Silv and Bald Eagle

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

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

Diversification Opportunities for Santacruz Silv and Bald Eagle

-0.38

Correlation Coefficient

Santacruz Silv  Bald Eagle

Very good diversification

The 3 months correlation between Santacruz and Bald is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Santacruz Silv 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 Santacruz Silv 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 Santacruz Silv 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 Santacruz Silv i.e., Santacruz Silv and Bald Eagle go up and down completely randomly.

Pair Corralation between Santacruz Silv and Bald Eagle

Assuming the 90 days horizon Santacruz Silv is expected to generate 1.28 times more return on investment than Bald Eagle. However, Santacruz Silv is 1.28 times more volatile than Bald Eagle Gold. It trades about 0.19 of its potential returns per unit of risk. Bald Eagle Gold is currently generating about -0.04 per unit of risk. If you would invest  21.00  in Santacruz Silv on September 2, 2024 and sell it today you would earn a total of  11.00  from holding Santacruz Silv or generate 52.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	61.54%
Values	Daily Returns

Santacruz Silv  vs.  Bald Eagle Gold

Santacruz Silv

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Santacruz Silv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Santacruz Silv 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 latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Santacruz Silv and Bald Eagle

The main advantage of trading using opposite Santacruz Silv and Bald Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santacruz Silv 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 Santacruz Silv 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.