Correlation Between CATCo Reinsurance and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both CATCo Reinsurance 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 CATCo Reinsurance and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATCo Reinsurance Opportunities and Silvercorp Metals, you can compare the effects of market volatilities on CATCo Reinsurance 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 CATCo Reinsurance with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATCo Reinsurance and Silvercorp Metals.
Diversification Opportunities for CATCo Reinsurance and Silvercorp Metals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATCo and Silvercorp is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CATCo Reinsurance Opportunitie and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and CATCo Reinsurance 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 CATCo Reinsurance Opportunities 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 CATCo Reinsurance i.e., CATCo Reinsurance and Silvercorp Metals go up and down completely randomly.
Pair Corralation between CATCo Reinsurance and Silvercorp Metals
Assuming the 90 days trading horizon CATCo Reinsurance Opportunities is expected to generate 2.27 times more return on investment than Silvercorp Metals. However, CATCo Reinsurance is 2.27 times more volatile than Silvercorp Metals. It trades about 0.21 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.31 per unit of risk. If you would invest 2,500 in CATCo Reinsurance Opportunities on September 1, 2024 and sell it today you would earn a total of 1,250 from holding CATCo Reinsurance Opportunities or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATCo Reinsurance Opportunitie vs. Silvercorp Metals
Performance |
| Timeline |
| CATCo Reinsurance |
| Silvercorp Metals |
CATCo Reinsurance and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATCo Reinsurance and Silvercorp Metals
The main advantage of trading using opposite CATCo Reinsurance and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATCo Reinsurance 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.| CATCo Reinsurance vs. Silvercorp Metals | CATCo Reinsurance vs. Future Metals NL | CATCo Reinsurance vs. Panther Metals PLC | CATCo Reinsurance vs. Wheaton Precious Metals |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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