Correlation Between Air Products and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Air Products and Silvercorp Metals 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 Air Products and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products Chemicals and Silvercorp Metals, you can compare the effects of market volatilities on Air Products and Silvercorp Metals 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 Air Products with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Silvercorp Metals.
Diversification Opportunities for Air Products and Silvercorp Metals
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Silvercorp is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Air Products Chemicals and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Air Products 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 Air Products Chemicals are associated (or correlated) with Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Air Products i.e., Air Products and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Air Products and Silvercorp Metals
Assuming the 90 days trading horizon Air Products Chemicals is expected to generate 1.73 times more return on investment than Silvercorp Metals. However, Air Products is 1.73 times more volatile than Silvercorp Metals. It trades about 0.03 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.03 per unit of risk. If you would invest 26,671 in Air Products Chemicals on September 2, 2024 and sell it today you would earn a total of 6,558 from holding Air Products Chemicals or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.2% |
| Values | Daily Returns |
Air Products Chemicals vs. Silvercorp Metals
Performance |
| Timeline |
| Air Products Chemicals |
| Silvercorp Metals |
Air Products and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Silvercorp Metals
The main advantage of trading using opposite Air Products and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Air Products vs. Uniper SE | Air Products vs. Mulberry Group PLC | Air Products vs. London Security Plc | Air Products vs. Triad Group PLC |
| Silvercorp Metals vs. Discover Financial Services | Silvercorp Metals vs. Supermarket Income REIT | Silvercorp Metals vs. Regions Financial Corp | Silvercorp Metals vs. Beazer Homes USA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets |