Correlation Between JD Sports and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Silvercorp Metals, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Silvercorp Metals.
Diversification Opportunities for JD Sports and Silvercorp Metals
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JD Sports and Silvercorp is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Silvercorp Metals go up and down completely randomly.
Pair Corralation between JD Sports and Silvercorp Metals
Assuming the 90 days trading horizon JD Sports Fashion is expected to under-perform the Silvercorp Metals. But the stock apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.5 times less risky than Silvercorp Metals. The stock trades about -0.2 of its potential returns per unit of risk. The Silvercorp Metals is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 472.00 in Silvercorp Metals on December 10, 2024 and sell it today you would earn a total of 75.00 from holding Silvercorp Metals or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Silvercorp Metals
Performance |
| Timeline |
| JD Sports Fashion |
| Silvercorp Metals |
JD Sports and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Silvercorp Metals
The main advantage of trading using opposite JD Sports and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.| JD Sports vs. Samsung Electronics Co | JD Sports vs. Samsung Electronics Co | JD Sports vs. Toyota Motor Corp | JD Sports vs. Hon Hai Precision |
| Silvercorp Metals vs. Toyota Motor Corp | Silvercorp Metals vs. SoftBank Group Corp | Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Samsung Electronics Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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