Correlation Between Silvercorp Metals and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and SMA Solar 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 SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and SMA Solar Technology, you can compare the effects of market volatilities on Silvercorp Metals and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and SMA Solar.
Diversification Opportunities for Silvercorp Metals and SMA Solar
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Silvercorp and SMA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and SMA Solar go up and down completely randomly.
Pair Corralation between Silvercorp Metals and SMA Solar
Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 0.88 times more return on investment than SMA Solar. However, Silvercorp Metals is 1.13 times less risky than SMA Solar. It trades about 0.03 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.08 per unit of risk. If you would invest 410.00 in Silvercorp Metals on November 7, 2024 and sell it today you would earn a total of 61.00 from holding Silvercorp Metals or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.32% |
| Values | Daily Returns |
Silvercorp Metals vs. SMA Solar Technology
Performance |
| Timeline |
| Silvercorp Metals |
| SMA Solar Technology |
Silvercorp Metals and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and SMA Solar
The main advantage of trading using opposite Silvercorp Metals and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Silvercorp Metals vs. Costco Wholesale Corp | Silvercorp Metals vs. LPKF Laser Electronics | Silvercorp Metals vs. Fevertree Drinks Plc | Silvercorp Metals vs. Samsung Electronics Co |
| SMA Solar vs. Wheaton Precious Metals | SMA Solar vs. Coeur Mining | SMA Solar vs. Eastinco Mining Exploration | SMA Solar vs. URU Metals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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