Correlation Between IShares Physical and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both IShares Physical 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 IShares Physical and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and Silvercorp Metals, you can compare the effects of market volatilities on IShares Physical 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 IShares Physical with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Silvercorp Metals.
Diversification Opportunities for IShares Physical and Silvercorp Metals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Silvercorp is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and IShares Physical 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 iShares Physical Silver 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 IShares Physical i.e., IShares Physical and Silvercorp Metals go up and down completely randomly.
Pair Corralation between IShares Physical and Silvercorp Metals
Assuming the 90 days trading horizon iShares Physical Silver is expected to generate 0.47 times more return on investment than Silvercorp Metals. However, iShares Physical Silver is 2.12 times less risky than Silvercorp Metals. It trades about -0.02 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.09 per unit of risk. If you would invest 2,966 in iShares Physical Silver on September 20, 2024 and sell it today you would lose (88.00) from holding iShares Physical Silver or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Physical Silver vs. Silvercorp Metals
Performance |
| Timeline |
| iShares Physical Silver |
| Silvercorp Metals |
IShares Physical and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Silvercorp Metals
The main advantage of trading using opposite IShares Physical and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical 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.| IShares Physical vs. Sabien Technology Group | IShares Physical vs. Polar Capital Technology | IShares Physical vs. Microchip Technology | IShares Physical vs. Elmos Semiconductor SE |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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