Silver vs Palladium: A completely different image
Although I would not recommend shorting silver now, I think it would be a nice and safe way to play the correlation between palladium and silver to go long palladium and short silver. In general, when commodities would drop, silver would have to fall more relative to palladium, so the gains on the silver short position should be bigger than the losses incured on the long palladium side. When commodities would continue to surge, palladium should rise more relative to silver, so the gain on the long palladium side should be bigger than the losses incurred on the short silver trade.
Overall, I think the general “commodity exposure” would be almost equal to zero, because of the high correlation between the two metals.
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