Correlation Between Roper Technologies and Silvercorp Metals

Can any of the company-specific risk be diversified away by investing in both Roper Technologies 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 Roper Technologies and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Roper Technologies and Silvercorp Metals, you can compare the effects of market volatilities on Roper Technologies 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 Roper Technologies with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roper Technologies and Silvercorp Metals.

Diversification Opportunities for Roper Technologies and Silvercorp Metals

0.24

Correlation Coefficient

Roper Technologies  Silvercorp Metals

Modest diversification

The 3 months correlation between Roper and Silvercorp is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Roper Technologies 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 Roper Technologies 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 Roper Technologies i.e., Roper Technologies and Silvercorp Metals go up and down completely randomly.

Pair Corralation between Roper Technologies and Silvercorp Metals

Assuming the 90 days trading horizon Roper Technologies is expected to under-perform the Silvercorp Metals. But the stock apears to be less risky and, when comparing its historical volatility, Roper Technologies is 2.71 times less risky than Silvercorp Metals. The stock trades about -0.62 of its potential returns per unit of risk. The Silvercorp Metals is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  444.00  in Silvercorp Metals on October 5, 2024 and sell it today you would lose (4.00) from holding Silvercorp Metals or give up 0.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Roper Technologies  vs.  Silvercorp Metals

Roper Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roper Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Roper Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Silvercorp Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silvercorp Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Roper Technologies and Silvercorp Metals

The main advantage of trading using opposite Roper Technologies and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies 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.

The idea behind Roper Technologies and Silvercorp Metals 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.

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.