Correlation Between Imperial Brands and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Imperial Brands 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 Imperial Brands and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Brands PLC and Silvercorp Metals, you can compare the effects of market volatilities on Imperial Brands 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 Imperial Brands with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Brands and Silvercorp Metals.
Diversification Opportunities for Imperial Brands and Silvercorp Metals
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imperial and Silvercorp is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Brands PLC and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Imperial Brands 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 Imperial Brands 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 Imperial Brands i.e., Imperial Brands and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Imperial Brands and Silvercorp Metals
Assuming the 90 days trading horizon Imperial Brands PLC is expected to generate 0.35 times more return on investment than Silvercorp Metals. However, Imperial Brands PLC is 2.82 times less risky than Silvercorp Metals. It trades about 0.3 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.04 per unit of risk. If you would invest 258,600 in Imperial Brands PLC on November 2, 2024 and sell it today you would earn a total of 11,000 from holding Imperial Brands PLC or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Imperial Brands PLC vs. Silvercorp Metals
Performance |
| Timeline |
| Imperial Brands PLC |
| Silvercorp Metals |
Imperial Brands and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Brands and Silvercorp Metals
The main advantage of trading using opposite Imperial Brands and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Brands 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.| Imperial Brands vs. Anglo Asian Mining | Imperial Brands vs. GoldMining | Imperial Brands vs. Ecclesiastical Insurance Office | Imperial Brands vs. Ally Financial |
| Silvercorp Metals vs. Vietnam Enterprise Investments | Silvercorp Metals vs. Adriatic Metals | Silvercorp Metals vs. CNH Industrial NV | Silvercorp Metals vs. Empire Metals Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |