Correlation Between Silvercorp Metals and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Scandic Hotels 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 Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Scandic Hotels Group, you can compare the effects of market volatilities on Silvercorp Metals and Scandic Hotels 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 Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Scandic Hotels.
Diversification Opportunities for Silvercorp Metals and Scandic Hotels
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silvercorp and Scandic is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Scandic Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandic Hotels Group 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 Scandic Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandic Hotels Group has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Scandic Hotels go up and down completely randomly.
Pair Corralation between Silvercorp Metals and Scandic Hotels
Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 1.78 times less return on investment than Scandic Hotels. In addition to that, Silvercorp Metals is 1.84 times more volatile than Scandic Hotels Group. It trades about 0.03 of its total potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.09 per unit of volatility. If you would invest 3,733 in Scandic Hotels Group on September 19, 2024 and sell it today you would earn a total of 2,980 from holding Scandic Hotels Group or generate 79.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.12% |
| Values | Daily Returns |
Silvercorp Metals vs. Scandic Hotels Group
Performance |
| Timeline |
| Silvercorp Metals |
| Scandic Hotels Group |
Silvercorp Metals and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and Scandic Hotels
The main advantage of trading using opposite Silvercorp Metals and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Scandic Hotels 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 Scandic Hotels will offset losses from the drop in Scandic Hotels' long position.| Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Hyundai Motor | Silvercorp Metals vs. Reliance Industries Ltd |
| Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Hyundai Motor | Scandic Hotels vs. Reliance Industries Ltd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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