Correlation Between McEwen Mining and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both McEwen Mining 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 McEwen Mining and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Silvercorp Metals, you can compare the effects of market volatilities on McEwen Mining 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 McEwen Mining with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Silvercorp Metals.
Diversification Opportunities for McEwen Mining and Silvercorp Metals
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between McEwen and Silvercorp is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and McEwen Mining 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 McEwen Mining 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 McEwen Mining i.e., McEwen Mining and Silvercorp Metals go up and down completely randomly.
Pair Corralation between McEwen Mining and Silvercorp Metals
Assuming the 90 days trading horizon McEwen Mining is expected to generate 0.5 times more return on investment than Silvercorp Metals. However, McEwen Mining is 2.0 times less risky than Silvercorp Metals. It trades about -0.4 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.36 per unit of risk. If you would invest 1,025 in McEwen Mining on August 31, 2024 and sell it today you would lose (202.00) from holding McEwen Mining or give up 19.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Silvercorp Metals
Performance |
| Timeline |
| McEwen Mining |
| Silvercorp Metals |
McEwen Mining and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Silvercorp Metals
The main advantage of trading using opposite McEwen Mining and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining 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.| McEwen Mining vs. Datalogic | McEwen Mining vs. Federal Realty Investment | McEwen Mining vs. Bankers Investment Trust | McEwen Mining vs. Automatic Data Processing |
| Silvercorp Metals vs. Neometals | Silvercorp Metals vs. Coor Service Management | Silvercorp Metals vs. Aeorema Communications Plc | Silvercorp Metals vs. JLEN Environmental Assets |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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