Correlation Between X-FAB Silicon and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon 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 X-FAB Silicon and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Silvercorp Metals, you can compare the effects of market volatilities on X-FAB Silicon 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 X-FAB Silicon with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Silvercorp Metals.
Diversification Opportunities for X-FAB Silicon and Silvercorp Metals
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between X-FAB and Silvercorp is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and X-FAB Silicon 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 X FAB Silicon Foundries 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 X-FAB Silicon i.e., X-FAB Silicon and Silvercorp Metals go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Silvercorp Metals
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.2 times more return on investment than Silvercorp Metals. However, X-FAB Silicon is 1.2 times more volatile than Silvercorp Metals. It trades about 0.09 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.04 per unit of risk. If you would invest 494.00 in X FAB Silicon Foundries on October 13, 2024 and sell it today you would earn a total of 18.00 from holding X FAB Silicon Foundries or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Silvercorp Metals
Performance |
| Timeline |
| X FAB Silicon |
| Silvercorp Metals |
X-FAB Silicon and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Silvercorp Metals
The main advantage of trading using opposite X-FAB Silicon and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon 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.| X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc | X-FAB Silicon vs. Apple Inc |
| Silvercorp Metals vs. AIR PRODCHEMICALS | Silvercorp Metals vs. China BlueChemical | Silvercorp Metals vs. X FAB Silicon Foundries | 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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