Correlation Between Silvercorp Metals and Invesco Physical

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

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

Diversification Opportunities for Silvercorp Metals and Invesco Physical

0.73

Correlation Coefficient

Silvercorp Metals  Invesco Physical

Poor diversification

The 3 months correlation between Silvercorp and Invesco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Invesco Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Physical Silver 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 Invesco Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Physical Silver has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Invesco Physical go up and down completely randomly.

Pair Corralation between Silvercorp Metals and Invesco Physical

Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 1.49 times more return on investment than Invesco Physical. However, Silvercorp Metals is 1.49 times more volatile than Invesco Physical Silver. It trades about -0.09 of its potential returns per unit of risk. Invesco Physical Silver is currently generating about -0.15 per unit of risk. If you would invest  455.00  in Silvercorp Metals on October 3, 2024 and sell it today you would lose (23.00) from holding Silvercorp Metals or give up 5.05% of portfolio value over 90 days.

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

Silvercorp Metals  vs.  Invesco Physical Silver

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.

Invesco Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Silvercorp Metals and Invesco Physical

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

The idea behind Silvercorp Metals and Invesco Physical Silver 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.