Correlation Between Silvercorp Metals and BP PLC
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and BP PLC 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 BP PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and BP PLC ADR, you can compare the effects of market volatilities on Silvercorp Metals and BP PLC 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 BP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and BP PLC.
Diversification Opportunities for Silvercorp Metals and BP PLC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Silvercorp and 0HKP is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and BP PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP PLC ADR 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 BP PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP PLC ADR has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and BP PLC go up and down completely randomly.
Pair Corralation between Silvercorp Metals and BP PLC
Assuming the 90 days trading horizon Silvercorp Metals is expected to under-perform the BP PLC. In addition to that, Silvercorp Metals is 3.11 times more volatile than BP PLC ADR. It trades about -0.14 of its total potential returns per unit of risk. BP PLC ADR is currently generating about 0.17 per unit of volatility. If you would invest 2,864 in BP PLC ADR on September 14, 2024 and sell it today you would earn a total of 164.00 from holding BP PLC ADR or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Silvercorp Metals vs. BP PLC ADR
Performance |
| Timeline |
| Silvercorp Metals |
| BP PLC ADR |
Silvercorp Metals and BP PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and BP PLC
The main advantage of trading using opposite Silvercorp Metals and BP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, BP PLC 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 BP PLC will offset losses from the drop in BP PLC's long position.| Silvercorp Metals vs. Applied Materials | Silvercorp Metals vs. Batm Advanced Communications | Silvercorp Metals vs. Indutrade AB | Silvercorp Metals vs. Wyndham Hotels Resorts |
| BP PLC vs. Silvercorp Metals | BP PLC vs. CleanTech Lithium plc | BP PLC vs. Blackrock World Mining | BP PLC vs. Endeavour Mining Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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