Correlation Between Gabriel Resources and Silver Wolf

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

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

Diversification Opportunities for Gabriel Resources and Silver Wolf

-0.53

Correlation Coefficient

Gabriel Resources  Silver Wolf

Excellent diversification

The 3 months correlation between Gabriel and Silver is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel Resources and Silver Wolf Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Wolf Exploration and Gabriel Resources 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 Gabriel Resources are associated (or correlated) with Silver Wolf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Wolf Exploration has no effect on the direction of Gabriel Resources i.e., Gabriel Resources and Silver Wolf go up and down completely randomly.

Pair Corralation between Gabriel Resources and Silver Wolf

Assuming the 90 days horizon Gabriel Resources is expected to under-perform the Silver Wolf. In addition to that, Gabriel Resources is 2.74 times more volatile than Silver Wolf Exploration. It trades about -0.01 of its total potential returns per unit of risk. Silver Wolf Exploration is currently generating about 0.34 per unit of volatility. If you would invest  7.00  in Silver Wolf Exploration on January 20, 2024 and sell it today you would earn a total of  6.00  from holding Silver Wolf Exploration or generate 85.71% return on investment over 90 days.

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

Gabriel Resources  vs.  Silver Wolf Exploration

Gabriel Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabriel Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Gabriel Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Silver Wolf Exploration

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Wolf Exploration are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Silver Wolf showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gabriel Resources and Silver Wolf

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

The idea behind Gabriel Resources and Silver Wolf Exploration 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.