Correlation Between Bloomsbury Publishing and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and Silvercorp Metals, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Silvercorp Metals.
Diversification Opportunities for Bloomsbury Publishing and Silvercorp Metals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bloomsbury and Silvercorp is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Bloomsbury Publishing 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 Bloomsbury Publishing Plc 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and Silvercorp Metals
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to generate 0.32 times more return on investment than Silvercorp Metals. However, Bloomsbury Publishing Plc is 3.12 times less risky than Silvercorp Metals. It trades about -0.06 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.31 per unit of risk. If you would invest 68,000 in Bloomsbury Publishing Plc on September 1, 2024 and sell it today you would lose (1,600) from holding Bloomsbury Publishing Plc or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. Silvercorp Metals
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| Silvercorp Metals |
Bloomsbury Publishing and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and Silvercorp Metals
The main advantage of trading using opposite Bloomsbury Publishing and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. Samsung Electronics Co | Bloomsbury Publishing vs. Samsung Electronics Co | Bloomsbury Publishing vs. Hyundai Motor | Bloomsbury Publishing vs. Reliance Industries Ltd |
| Silvercorp Metals vs. Uniper SE | Silvercorp Metals vs. Mulberry Group PLC | Silvercorp Metals vs. London Security Plc | Silvercorp Metals vs. Triad Group PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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