Correlation Between Silver Mines and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Silver Mines and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) 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 SCANSOURCE, you can compare the effects of market volatilities on Silver Mines and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Mines and SCANSOURCE (SC3SG).
Diversification Opportunities for Silver Mines and SCANSOURCE (SC3SG)
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Silver and SCANSOURCE is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Silver Mines Limited and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of Silver Mines i.e., Silver Mines and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Silver Mines and SCANSOURCE (SC3SG)
Assuming the 90 days horizon Silver Mines is expected to generate 1.09 times less return on investment than SCANSOURCE (SC3SG). In addition to that, Silver Mines is 3.78 times more volatile than SCANSOURCE. It trades about 0.01 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.05 per unit of volatility. If you would invest 2,980 in SCANSOURCE on October 11, 2024 and sell it today you would earn a total of 1,620 from holding SCANSOURCE or generate 54.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Mines Limited vs. SCANSOURCE
Performance |
| Timeline |
| Silver Mines Limited |
| SCANSOURCE (SC3SG) |
Silver Mines and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Mines and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Silver Mines and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Mines position performs unexpectedly, SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.| Silver Mines vs. Jacquet Metal Service | Silver Mines vs. CVB Financial Corp | Silver Mines vs. Solstad Offshore ASA | Silver Mines vs. GALENA MINING LTD |
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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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