Correlation Between AIR PRODCHEMICALS and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Silvercorp Metals, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Silvercorp Metals.
Diversification Opportunities for AIR PRODCHEMICALS and Silvercorp Metals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between AIR and Silvercorp is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Silvercorp Metals go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Silvercorp Metals
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the Silvercorp Metals. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 2.79 times less risky than Silvercorp Metals. The stock trades about -0.52 of its potential returns per unit of risk. The Silvercorp Metals is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Silvercorp Metals on October 13, 2024 and sell it today you would lose (5.00) from holding Silvercorp Metals or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Silvercorp Metals
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Silvercorp Metals |
AIR PRODCHEMICALS and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Silvercorp Metals
The main advantage of trading using opposite AIR PRODCHEMICALS and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Focus Home Interactive | AIR PRODCHEMICALS vs. INVITATION HOMES DL | AIR PRODCHEMICALS vs. WESANA HEALTH HOLD | AIR PRODCHEMICALS vs. ADDUS HOMECARE |
| Silvercorp Metals vs. AIR PRODCHEMICALS | Silvercorp Metals vs. China BlueChemical | Silvercorp Metals vs. X FAB Silicon Foundries | Silvercorp Metals vs. Air New Zealand |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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