Correlation Between MG Plc and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both MG Plc 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 MG Plc and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MG Plc and Silvercorp Metals, you can compare the effects of market volatilities on MG Plc 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 MG Plc with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of MG Plc and Silvercorp Metals.
Diversification Opportunities for MG Plc and Silvercorp Metals
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MNG and Silvercorp is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MG Plc and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and MG Plc 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 MG 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 MG Plc i.e., MG Plc and Silvercorp Metals go up and down completely randomly.
Pair Corralation between MG Plc and Silvercorp Metals
Assuming the 90 days trading horizon MG Plc is expected to generate 0.21 times more return on investment than Silvercorp Metals. However, MG Plc is 4.8 times less risky than Silvercorp Metals. It trades about 0.05 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.36 per unit of risk. If you would invest 19,750 in MG Plc on August 31, 2024 and sell it today you would earn a total of 185.00 from holding MG Plc or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MG Plc vs. Silvercorp Metals
Performance |
| Timeline |
| MG Plc |
| Silvercorp Metals |
MG Plc and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MG Plc and Silvercorp Metals
The main advantage of trading using opposite MG Plc and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MG Plc 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.| MG Plc vs. Zegona Communications Plc | MG Plc vs. Charter Communications Cl | MG Plc vs. Ameriprise Financial | MG Plc vs. Sydbank |
| Silvercorp Metals vs. Neometals | Silvercorp Metals vs. Coor Service Management | Silvercorp Metals vs. Aeorema Communications Plc | Silvercorp Metals vs. JLEN Environmental Assets |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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