Correlation Between Silvercorp Metals and InterContinental

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

By analyzing existing cross correlation between Silvercorp Metals and InterContinental Hotels Group, you can compare the effects of market volatilities on Silvercorp Metals and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and InterContinental.

Diversification Opportunities for Silvercorp Metals and InterContinental

-0.85

Correlation Coefficient

Silvercorp Metals  InterContinental

Pay attention - limited upside

The 3 months correlation between Silvercorp and InterContinental is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and InterContinental go up and down completely randomly.

Pair Corralation between Silvercorp Metals and InterContinental

Assuming the 90 days trading horizon Silvercorp Metals is expected to under-perform the InterContinental. In addition to that, Silvercorp Metals is 3.13 times more volatile than InterContinental Hotels Group. It trades about -0.13 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.26 per unit of volatility. If you would invest  823,000  in InterContinental Hotels Group on September 26, 2024 and sell it today you would earn a total of  177,500  from holding InterContinental Hotels Group or generate 21.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Silvercorp Metals  vs.  InterContinental Hotels Group

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

InterContinental Hotels

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, InterContinental exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silvercorp Metals and InterContinental

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

The idea behind Silvercorp Metals and InterContinental Hotels Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..