Correlation Between Silvercorp Metals and Constellium
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Constellium 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 Silvercorp Metals and Constellium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Constellium Nv, you can compare the effects of market volatilities on Silvercorp Metals and Constellium 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 Silvercorp Metals with a short position of Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Constellium.
Diversification Opportunities for Silvercorp Metals and Constellium
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Silvercorp and Constellium is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv and Silvercorp Metals 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 Silvercorp Metals are associated (or correlated) with Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Constellium go up and down completely randomly.
Pair Corralation between Silvercorp Metals and Constellium
Considering the 90-day investment horizon Silvercorp Metals is expected to under-perform the Constellium. In addition to that, Silvercorp Metals is 2.0 times more volatile than Constellium Nv. It trades about -0.35 of its total potential returns per unit of risk. Constellium Nv is currently generating about 0.22 per unit of volatility. If you would invest 1,119 in Constellium Nv on September 5, 2024 and sell it today you would earn a total of 107.00 from holding Constellium Nv or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silvercorp Metals vs. Constellium Nv
Performance |
| Timeline |
| Silvercorp Metals |
| Constellium Nv |
Silvercorp Metals and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and Constellium
The main advantage of trading using opposite Silvercorp Metals and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Constellium 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 Constellium will offset losses from the drop in Constellium's long position.| Silvercorp Metals vs. Constellium Nv | Silvercorp Metals vs. Century Aluminum | Silvercorp Metals vs. China Hongqiao Group | Silvercorp Metals vs. Kaiser Aluminum |
| Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Norsk Hydro ASA |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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