Correlation Between Ming Le and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and Silvercorp Metals, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and Silvercorp Metals.
Diversification Opportunities for Ming Le and Silvercorp Metals
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ming and Silvercorp is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Ming Le 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 Ming Le Sports 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 Ming Le i.e., Ming Le and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Ming Le and Silvercorp Metals
Assuming the 90 days horizon Ming Le Sports is expected to under-perform the Silvercorp Metals. But the stock apears to be less risky and, when comparing its historical volatility, Ming Le Sports is 1.05 times less risky than Silvercorp Metals. The stock trades about -0.38 of its potential returns per unit of risk. The Silvercorp Metals is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 315.00 in Silvercorp Metals on September 22, 2024 and sell it today you would lose (24.00) from holding Silvercorp Metals or give up 7.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Le Sports vs. Silvercorp Metals
Performance |
| Timeline |
| Ming Le Sports |
| Silvercorp Metals |
Ming Le and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and Silvercorp Metals
The main advantage of trading using opposite Ming Le and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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.The idea behind Ming Le Sports and Silvercorp Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Silvercorp Metals vs. Ares Management Corp | Silvercorp Metals vs. ALTAIR RES INC | Silvercorp Metals vs. Brockhaus Capital Management | Silvercorp Metals vs. Air New Zealand |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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