Correlation Between Silvercorp Metals and Cellnex Telecom

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

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

Diversification Opportunities for Silvercorp Metals and Cellnex Telecom

0.52

Correlation Coefficient

Silvercorp Metals  Cellnex Telecom

Very weak diversification

The 3 months correlation between Silvercorp and Cellnex is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA and Silvercorp Metals 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 Silvercorp Metals are associated (or correlated) with Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Cellnex Telecom go up and down completely randomly.

Pair Corralation between Silvercorp Metals and Cellnex Telecom

Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 1.39 times more return on investment than Cellnex Telecom. However, Silvercorp Metals is 1.39 times more volatile than Cellnex Telecom SA. It trades about 0.2 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.08 per unit of risk. If you would invest  429.00  in Silvercorp Metals on December 25, 2024 and sell it today you would earn a total of  146.00  from holding Silvercorp Metals or generate 34.03% return on investment over 90 days.

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

Silvercorp Metals  vs.  Cellnex Telecom SA

Silvercorp Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Silvercorp Metals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Silvercorp Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cellnex Telecom SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cellnex Telecom SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cellnex Telecom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Silvercorp Metals and Cellnex Telecom

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

The idea behind Silvercorp Metals and Cellnex Telecom SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.