Correlation Between Aftermath Silver and Erdene Resource

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

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

Diversification Opportunities for Aftermath Silver and Erdene Resource

0.28

Correlation Coefficient

Aftermath Silver  Erdene Resource

Modest diversification

The 3 months correlation between Aftermath and Erdene is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Erdene Resource Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erdene Resource Deve and Aftermath Silver 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 Aftermath Silver are associated (or correlated) with Erdene Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erdene Resource Deve has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Erdene Resource go up and down completely randomly.

Pair Corralation between Aftermath Silver and Erdene Resource

Assuming the 90 days horizon Aftermath Silver is expected to generate 1.45 times more return on investment than Erdene Resource. However, Aftermath Silver is 1.45 times more volatile than Erdene Resource Development. It trades about 0.23 of its potential returns per unit of risk. Erdene Resource Development is currently generating about 0.04 per unit of risk. If you would invest  47.00  in Aftermath Silver on April 24, 2025 and sell it today you would earn a total of  42.00  from holding Aftermath Silver or generate 89.36% return on investment over 90 days.

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

Aftermath Silver  vs.  Erdene Resource Development

Aftermath Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Aftermath Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Erdene Resource Deve

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Erdene Resource Development are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Erdene Resource may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Aftermath Silver and Erdene Resource

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

The idea behind Aftermath Silver and Erdene Resource Development 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.