Correlation Between Hycroft Mining and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both Hycroft Mining 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 Hycroft Mining and Gatos Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hycroft Mining Holding and Gatos Silver, you can compare the effects of market volatilities on Hycroft Mining 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 Hycroft Mining with a short position of Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Gatos Silver.
Diversification Opportunities for Hycroft Mining and Gatos Silver
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hycroft and Gatos is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and Hycroft Mining 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 Hycroft Mining Holding 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 Hycroft Mining i.e., Hycroft Mining and Gatos Silver go up and down completely randomly.
Pair Corralation between Hycroft Mining and Gatos Silver
Given the investment horizon of 90 days Hycroft Mining is expected to generate 2.77 times less return on investment than Gatos Silver. But when comparing it to its historical volatility, Hycroft Mining Holding is 1.06 times less risky than Gatos Silver. It trades about 0.17 of its potential returns per unit of risk. Gatos Silver is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 560.00 in Gatos Silver on December 29, 2023 and sell it today you would earn a total of 257.00 from holding Gatos Silver or generate 45.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Hycroft Mining Holding vs. Gatos Silver
Performance |
Timeline |
Hycroft Mining Holding |
Gatos Silver |
Hycroft Mining and Gatos Silver Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hycroft Mining and Gatos Silver
The main advantage of trading using opposite Hycroft Mining and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hycroft Mining 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.Hycroft Mining vs. Chemours Co | Hycroft Mining vs. Quanex Building Products | Hycroft Mining vs. FutureFuel Corp | Hycroft Mining vs. CF Industries Holdings |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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