Correlation Between Delta Air and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Delta Air and Silvercorp 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 Delta Air and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Silvercorp Metals, you can compare the effects of market volatilities on Delta Air and Silvercorp 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 Delta Air with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Silvercorp Metals.
Diversification Opportunities for Delta Air and Silvercorp Metals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Delta and Silvercorp is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Delta Air 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 Delta Air Lines are associated (or correlated) with Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Delta Air i.e., Delta Air and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Delta Air and Silvercorp Metals
Assuming the 90 days trading horizon Delta Air Lines is expected to under-perform the Silvercorp Metals. But the stock apears to be less risky and, when comparing its historical volatility, Delta Air Lines is 1.15 times less risky than Silvercorp Metals. The stock trades about -0.17 of its potential returns per unit of risk. The Silvercorp Metals is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 432.00 in Silvercorp Metals on November 28, 2024 and sell it today you would earn a total of 79.00 from holding Silvercorp Metals or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Delta Air Lines vs. Silvercorp Metals
Performance |
| Timeline |
| Delta Air Lines |
| Silvercorp Metals |
Delta Air and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Silvercorp Metals
The main advantage of trading using opposite Delta Air and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Silvercorp 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Delta Air vs. Fresenius Medical Care | Delta Air vs. National Beverage Corp | Delta Air vs. Grieg Seafood | Delta Air vs. Edita Food Industries |
| Silvercorp Metals vs. Sealed Air Corp | Silvercorp Metals vs. Take Two Interactive Software | Silvercorp Metals vs. Allianz Technology Trust | Silvercorp Metals vs. Check Point Software |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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