Correlation Between NEW PACIFIC and CARTIER SILVER

Can any of the company-specific risk be diversified away by investing in both NEW PACIFIC and CARTIER 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 NEW PACIFIC and CARTIER SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEW PACIFIC METALS and CARTIER SILVER P, you can compare the effects of market volatilities on NEW PACIFIC and CARTIER 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 NEW PACIFIC with a short position of CARTIER SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW PACIFIC and CARTIER SILVER.

Diversification Opportunities for NEW PACIFIC and CARTIER SILVER

0.58

Correlation Coefficient

NEW PACIFIC  CARTIER SILVER

Very weak diversification

The 3 months correlation between NEW and CARTIER is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NEW PACIFIC METALS and CARTIER SILVER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARTIER SILVER P and NEW PACIFIC 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 NEW PACIFIC METALS are associated (or correlated) with CARTIER SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARTIER SILVER P has no effect on the direction of NEW PACIFIC i.e., NEW PACIFIC and CARTIER SILVER go up and down completely randomly.

Pair Corralation between NEW PACIFIC and CARTIER SILVER

Assuming the 90 days trading horizon NEW PACIFIC METALS is expected to generate 0.44 times more return on investment than CARTIER SILVER. However, NEW PACIFIC METALS is 2.26 times less risky than CARTIER SILVER. It trades about 0.17 of its potential returns per unit of risk. CARTIER SILVER P is currently generating about 0.06 per unit of risk. If you would invest  100.00  in NEW PACIFIC METALS on April 24, 2025 and sell it today you would earn a total of  44.00  from holding NEW PACIFIC METALS or generate 44.0% return on investment over 90 days.

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

NEW PACIFIC METALS  vs.  CARTIER SILVER P

NEW PACIFIC METALS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEW PACIFIC METALS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NEW PACIFIC reported solid returns over the last few months and may actually be approaching a breakup point.

CARTIER SILVER P

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CARTIER SILVER P are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, CARTIER SILVER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NEW PACIFIC and CARTIER SILVER

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

The idea behind NEW PACIFIC METALS and CARTIER SILVER P 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.