Correlation Between Silver Mines and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Silver Mines 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 Silver Mines and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Mines Limited and Silvercorp Metals, you can compare the effects of market volatilities on Silver Mines 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 Silver Mines with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Mines and Silvercorp Metals.
Diversification Opportunities for Silver Mines and Silvercorp Metals
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silver and Silvercorp is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Silver Mines Limited and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Silver Mines 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 Silver Mines Limited 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 Silver Mines i.e., Silver Mines and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Silver Mines and Silvercorp Metals
Assuming the 90 days horizon Silver Mines Limited is expected to under-perform the Silvercorp Metals. In addition to that, Silver Mines is 3.07 times more volatile than Silvercorp Metals. It trades about -0.11 of its total potential returns per unit of risk. Silvercorp Metals is currently generating about -0.23 per unit of volatility. If you would invest 328.00 in Silvercorp Metals on September 23, 2024 and sell it today you would lose (37.00) from holding Silvercorp Metals or give up 11.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Mines Limited vs. Silvercorp Metals
Performance |
| Timeline |
| Silver Mines Limited |
| Silvercorp Metals |
Silver Mines and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Mines and Silvercorp Metals
The main advantage of trading using opposite Silver Mines and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Mines 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.| Silver Mines vs. Pan American Silver | Silver Mines vs. First Majestic Silver | Silver Mines vs. MAG Silver Corp | Silver Mines vs. Silvercorp Metals |
| Silvercorp Metals vs. Pan American Silver | Silvercorp Metals vs. First Majestic Silver | Silvercorp Metals vs. MAG Silver Corp | Silvercorp Metals vs. Endeavour Silver Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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