Correlation Between Pan Amer and Hercules Silver

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Can any of the company-specific risk be diversified away by investing in both Pan Amer and Hercules 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 Pan Amer and Hercules Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Amer Silver and Hercules Silver Corp, you can compare the effects of market volatilities on Pan Amer and Hercules 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 Pan Amer with a short position of Hercules Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Amer and Hercules Silver.

Diversification Opportunities for Pan Amer and Hercules Silver

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pan Amer and Hercules is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pan Amer Silver and Hercules Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Silver Corp and Pan Amer 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 Pan Amer Silver are associated (or correlated) with Hercules Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Silver Corp has no effect on the direction of Pan Amer i.e., Pan Amer and Hercules Silver go up and down completely randomly.

Pair Corralation between Pan Amer and Hercules Silver

Given the investment horizon of 90 days Pan Amer Silver is expected to under-perform the Hercules Silver. But the stock apears to be less risky and, when comparing its historical volatility, Pan Amer Silver is 3.43 times less risky than Hercules Silver. The stock trades about -0.03 of its potential returns per unit of risk. The Hercules Silver Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.60  in Hercules Silver Corp on August 30, 2022 and sell it today you would lose (3.00)  from holding Hercules Silver Corp or give up 34.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy25.9%
ValuesDaily Returns

Pan Amer Silver  vs.  Hercules Silver Corp

 Performance (%) 
       Timeline  
Pan Amer Silver 
Pan Amer Performance
0 of 100
Over the last 90 days Pan Amer Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Pan Amer is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pan Amer Price Channel

Hercules Silver Corp 
Hercules Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hercules Silver Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Hercules Silver exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hercules Price Channel

Pan Amer and Hercules Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pan Amer and Hercules Silver

The main advantage of trading using opposite Pan Amer and Hercules Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Amer position performs unexpectedly, Hercules 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 Hercules Silver will offset losses from the drop in Hercules Silver's long position.
Pan Amer vs. Santacruz Silver
The idea behind Pan Amer Silver and Hercules Silver 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.
Hercules Silver vs. Santacruz Silver
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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