Correlation Between Silver Ridge and Press Metal

Can any of the company-specific risk be diversified away by investing in both Silver Ridge and Press Metal 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 Ridge and Press Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Silver Ridge Holdings and Press Metal Bhd, you can compare the effects of market volatilities on Silver Ridge and Press Metal 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 Ridge with a short position of Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Ridge and Press Metal.

Diversification Opportunities for Silver Ridge and Press Metal

-0.39

Correlation Coefficient

Silver Ridge  Press Metal

Very good diversification

The 3 months correlation between Silver and Press is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Silver Ridge Holdings and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal Bhd and Silver Ridge 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 Ridge Holdings are associated (or correlated) with Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of Silver Ridge i.e., Silver Ridge and Press Metal go up and down completely randomly.

Pair Corralation between Silver Ridge and Press Metal

Assuming the 90 days trading horizon Silver Ridge Holdings is expected to under-perform the Press Metal. In addition to that, Silver Ridge is 2.29 times more volatile than Press Metal Bhd. It trades about -0.12 of its total potential returns per unit of risk. Press Metal Bhd is currently generating about -0.09 per unit of volatility. If you would invest  498.00  in Press Metal Bhd on October 6, 2024 and sell it today you would lose (13.00) from holding Press Metal Bhd or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Silver Ridge Holdings  vs.  Press Metal Bhd

Silver Ridge Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Ridge Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Silver Ridge may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Press Metal Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Press Metal Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Press Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Silver Ridge and Press Metal

The main advantage of trading using opposite Silver Ridge and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Ridge position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.

The idea behind Silver Ridge Holdings and Press Metal Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.