Correlation Between European Metals and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Silvercorp Metals, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Silvercorp Metals.
Diversification Opportunities for European Metals and Silvercorp Metals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between European and Silvercorp is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and European 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 European Metals Holdings 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 European Metals i.e., European Metals and Silvercorp Metals go up and down completely randomly.
Pair Corralation between European Metals and Silvercorp Metals
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Silvercorp Metals. In addition to that, European Metals is 1.16 times more volatile than Silvercorp Metals. It trades about -0.07 of its total potential returns per unit of risk. Silvercorp Metals is currently generating about 0.03 per unit of volatility. If you would invest 404.00 in Silvercorp Metals on August 24, 2024 and sell it today you would earn a total of 73.00 from holding Silvercorp Metals or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.35% |
| Values | Daily Returns |
European Metals Holdings vs. Silvercorp Metals
Performance |
| Timeline |
| European Metals Holdings |
| Silvercorp Metals |
European Metals and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Silvercorp Metals
The main advantage of trading using opposite European Metals and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Synthomer plc | European Metals vs. JB Hunt Transport | European Metals vs. GreenX Metals | European Metals vs. Cizzle Biotechnology Holdings |
| Silvercorp Metals vs. Quadrise Plc | Silvercorp Metals vs. Intuitive Investments Group | Silvercorp Metals vs. European Metals Holdings | Silvercorp Metals vs. Athelney Trust 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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