Correlation Between Silvercorp Metals and River
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and River 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 River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and River and Mercantile, you can compare the effects of market volatilities on Silvercorp Metals and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and River.
Diversification Opportunities for Silvercorp Metals and River
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Silvercorp and River is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and River go up and down completely randomly.
Pair Corralation between Silvercorp Metals and River
Assuming the 90 days trading horizon Silvercorp Metals is expected to under-perform the River. In addition to that, Silvercorp Metals is 4.22 times more volatile than River and Mercantile. It trades about -0.31 of its total potential returns per unit of risk. River and Mercantile is currently generating about 0.29 per unit of volatility. If you would invest 17,100 in River and Mercantile on August 29, 2024 and sell it today you would earn a total of 1,300 from holding River and Mercantile or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silvercorp Metals vs. River and Mercantile
Performance |
| Timeline |
| Silvercorp Metals |
| River and Mercantile |
Silvercorp Metals and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and River
The main advantage of trading using opposite Silvercorp Metals and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, River 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 River will offset losses from the drop in River's 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 |
| River vs. McEwen Mining | River vs. Bisichi Mining PLC | River vs. Greenroc Mining PLC | River vs. AMG Advanced Metallurgical |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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