Correlation Between Impax Environmental and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Silvercorp Metals, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Silvercorp Metals.
Diversification Opportunities for Impax Environmental and Silvercorp Metals
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Impax and Silvercorp is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Impax Environmental and Silvercorp Metals
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.19 times more return on investment than Silvercorp Metals. However, Impax Environmental Markets is 5.27 times less risky than Silvercorp Metals. It trades about -0.03 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.09 per unit of risk. If you would invest 38,550 in Impax Environmental Markets on September 20, 2024 and sell it today you would lose (650.00) from holding Impax Environmental Markets or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Silvercorp Metals
Performance |
| Timeline |
| Impax Environmental |
| Silvercorp Metals |
Impax Environmental and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Silvercorp Metals
The main advantage of trading using opposite Impax Environmental and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Catalyst Media Group | Impax Environmental vs. CATLIN GROUP | Impax Environmental vs. Tamburi Investment Partners | Impax Environmental vs. Magnora ASA |
| Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Hyundai Motor | Silvercorp Metals vs. Reliance Industries Ltd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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