Correlation Between Silvercorp Metals and Air Products
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Air Products 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 Silvercorp Metals and Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Air Products Chemicals, you can compare the effects of market volatilities on Silvercorp Metals and Air Products 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 Silvercorp Metals with a short position of Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Air Products.
Diversification Opportunities for Silvercorp Metals and Air Products
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Silvercorp and Air is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals and Silvercorp Metals 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 Silvercorp Metals are associated (or correlated) with Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Air Products go up and down completely randomly.
Pair Corralation between Silvercorp Metals and Air Products
Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 2.22 times less return on investment than Air Products. But when comparing it to its historical volatility, Silvercorp Metals is 1.73 times less risky than Air Products. It trades about 0.03 of its potential returns per unit of risk. Air Products Chemicals is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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 |
Silvercorp Metals vs. Air Products Chemicals
Performance |
| Timeline |
| Silvercorp Metals |
| Air Products Chemicals |
Silvercorp Metals and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and Air Products
The main advantage of trading using opposite Silvercorp Metals and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Silvercorp Metals vs. Discover Financial Services | Silvercorp Metals vs. Supermarket Income REIT | Silvercorp Metals vs. Regions Financial Corp | Silvercorp Metals vs. Beazer Homes USA |
| Air Products vs. Uniper SE | Air Products vs. Mulberry Group PLC | Air Products vs. London Security Plc | Air Products vs. Triad Group PLC |
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.
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