Correlation Between METALL ZUG and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both METALL ZUG 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 METALL ZUG and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METALL ZUG AG and Silvercorp Metals, you can compare the effects of market volatilities on METALL ZUG 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 METALL ZUG with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of METALL ZUG and Silvercorp Metals.
Diversification Opportunities for METALL ZUG and Silvercorp Metals
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between METALL and Silvercorp is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding METALL ZUG AG and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and METALL ZUG 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 METALL ZUG AG 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 METALL ZUG i.e., METALL ZUG and Silvercorp Metals go up and down completely randomly.
Pair Corralation between METALL ZUG and Silvercorp Metals
Assuming the 90 days trading horizon METALL ZUG AG is expected to generate 0.26 times more return on investment than Silvercorp Metals. However, METALL ZUG AG is 3.87 times less risky than Silvercorp Metals. It trades about -0.08 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.21 per unit of risk. If you would invest 117,000 in METALL ZUG AG on September 18, 2024 and sell it today you would lose (2,500) from holding METALL ZUG AG or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
METALL ZUG AG vs. Silvercorp Metals
Performance |
| Timeline |
| METALL ZUG AG |
| Silvercorp Metals |
METALL ZUG and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METALL ZUG and Silvercorp Metals
The main advantage of trading using opposite METALL ZUG and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METALL ZUG 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.| METALL ZUG vs. Samsung Electronics Co | METALL ZUG vs. Samsung Electronics Co | METALL ZUG vs. Hyundai Motor | METALL ZUG vs. Reliance Industries Ltd |
| Silvercorp Metals vs. Ecclesiastical Insurance Office | Silvercorp Metals vs. Wheaton Precious Metals | Silvercorp Metals vs. Games Workshop Group | Silvercorp Metals vs. METALL ZUG AG |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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