Correlation Between Silvercorp Metals and Inspiration Healthcare
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Inspiration Healthcare 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 Inspiration Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Inspiration Healthcare Group, you can compare the effects of market volatilities on Silvercorp Metals and Inspiration Healthcare 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 Inspiration Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Inspiration Healthcare.
Diversification Opportunities for Silvercorp Metals and Inspiration Healthcare
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Silvercorp and Inspiration is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Inspiration Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspiration Healthcare 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 Inspiration Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspiration Healthcare has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Inspiration Healthcare go up and down completely randomly.
Pair Corralation between Silvercorp Metals and Inspiration Healthcare
Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 0.68 times more return on investment than Inspiration Healthcare. However, Silvercorp Metals is 1.47 times less risky than Inspiration Healthcare. It trades about 0.06 of its potential returns per unit of risk. Inspiration Healthcare Group is currently generating about -0.07 per unit of risk. If you would invest 321.00 in Silvercorp Metals on November 7, 2024 and sell it today you would earn a total of 150.00 from holding Silvercorp Metals or generate 46.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Silvercorp Metals vs. Inspiration Healthcare Group
Performance |
| Timeline |
| Silvercorp Metals |
| Inspiration Healthcare |
Silvercorp Metals and Inspiration Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and Inspiration Healthcare
The main advantage of trading using opposite Silvercorp Metals and Inspiration Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Inspiration Healthcare 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 Inspiration Healthcare will offset losses from the drop in Inspiration Healthcare's long position.| Silvercorp Metals vs. Ecofin Global Utilities | Silvercorp Metals vs. Fonix Mobile plc | Silvercorp Metals vs. Norwegian Air Shuttle | Silvercorp Metals vs. Spirent Communications plc |
| Inspiration Healthcare vs. Roper Technologies | Inspiration Healthcare vs. Infineon Technologies AG | Inspiration Healthcare vs. Polar Capital Technology | Inspiration Healthcare vs. Melia Hotels |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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