Correlation Between Reyna Silver and Silvercorp Metals

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

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

Diversification Opportunities for Reyna Silver and Silvercorp Metals

-0.75

Correlation Coefficient

Reyna Silver  Silvercorp Metals

Pay attention - limited upside

The 3 months correlation between Reyna and Silvercorp is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Reyna Silver Corp and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Reyna Silver 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 Reyna Silver Corp 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 Reyna Silver i.e., Reyna Silver and Silvercorp Metals go up and down completely randomly.

Pair Corralation between Reyna Silver and Silvercorp Metals

Assuming the 90 days horizon Reyna Silver Corp is expected to under-perform the Silvercorp Metals. In addition to that, Reyna Silver is 1.65 times more volatile than Silvercorp Metals. It trades about -0.07 of its total potential returns per unit of risk. Silvercorp Metals is currently generating about 0.16 per unit of volatility. If you would invest  291.00  in Silvercorp Metals on December 30, 2024 and sell it today you would earn a total of  97.00  from holding Silvercorp Metals or generate 33.33% return on investment over 90 days.

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

Reyna Silver Corp  vs.  Silvercorp Metals

Reyna Silver Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reyna Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Silvercorp Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silvercorp Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Silvercorp Metals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Reyna Silver and Silvercorp Metals

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

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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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.