Correlation Between Silvercorp Metals and Future Metals
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Future Metals 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 Future Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Future Metals NL, you can compare the effects of market volatilities on Silvercorp Metals and Future Metals 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 Future Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Future Metals.
Diversification Opportunities for Silvercorp Metals and Future Metals
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silvercorp and Future is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Future Metals NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Metals NL 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 Future Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Metals NL has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Future Metals go up and down completely randomly.
Pair Corralation between Silvercorp Metals and Future Metals
Assuming the 90 days trading horizon Silvercorp Metals is expected to under-perform the Future Metals. In addition to that, Silvercorp Metals is 1.37 times more volatile than Future Metals NL. It trades about -0.26 of its total potential returns per unit of risk. Future Metals NL is currently generating about -0.29 per unit of volatility. If you would invest 115.00 in Future Metals NL on September 5, 2024 and sell it today you would lose (25.00) from holding Future Metals NL or give up 21.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silvercorp Metals vs. Future Metals NL
Performance |
| Timeline |
| Silvercorp Metals |
| Future Metals NL |
Silvercorp Metals and Future Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and Future Metals
The main advantage of trading using opposite Silvercorp Metals and Future Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Future Metals 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 Future Metals will offset losses from the drop in Future Metals' long position.| Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Hyundai Motor | Silvercorp Metals vs. Toyota Motor Corp |
| Future Metals vs. Microchip Technology | Future Metals vs. Silvercorp Metals | Future Metals vs. Celebrus Technologies plc | Future Metals vs. DXC Technology Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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