Correlation Between Silvercorp Metals and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Abingdon Health 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 Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Abingdon Health Plc, you can compare the effects of market volatilities on Silvercorp Metals and Abingdon Health 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Abingdon Health.
Diversification Opportunities for Silvercorp Metals and Abingdon Health
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Silvercorp and Abingdon is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Abingdon Health go up and down completely randomly.
Pair Corralation between Silvercorp Metals and Abingdon Health
Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 2.27 times more return on investment than Abingdon Health. However, Silvercorp Metals is 2.27 times more volatile than Abingdon Health Plc. It trades about 0.38 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about -0.39 per unit of risk. If you would invest 432.00 in Silvercorp Metals on November 29, 2024 and sell it today you would earn a total of 99.00 from holding Silvercorp Metals or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silvercorp Metals vs. Abingdon Health Plc
Performance |
| Timeline |
| Silvercorp Metals |
| Abingdon Health Plc |
Silvercorp Metals and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and Abingdon Health
The main advantage of trading using opposite Silvercorp Metals and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Silvercorp Metals vs. SMA Solar Technology | Silvercorp Metals vs. Polar Capital Technology | Silvercorp Metals vs. Learning Technologies Group | Silvercorp Metals vs. Vitec Software Group |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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