Correlation Between Silvercorp Metals and Aya Gold

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Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals and Aya Gold 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 Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and Aya Gold Silver, you can compare the effects of market volatilities on Silvercorp Metals and Aya Gold 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 Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and Aya Gold.

Diversification Opportunities for Silvercorp Metals and Aya Gold

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Silvercorp and Aya is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold 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 Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Aya Gold go up and down completely randomly.

Pair Corralation between Silvercorp Metals and Aya Gold

Considering the 90-day investment horizon Silvercorp Metals is expected to generate 0.84 times more return on investment than Aya Gold. However, Silvercorp Metals is 1.19 times less risky than Aya Gold. It trades about -0.01 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.01 per unit of risk. If you would invest  350.00  in Silvercorp Metals on September 3, 2024 and sell it today you would lose (21.00) from holding Silvercorp Metals or give up 6.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Silvercorp Metals  vs.  Aya Gold Silver

 Performance 
       Timeline  
Silvercorp Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 very healthy basic indicators, Silvercorp Metals is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Aya Gold Silver 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aya Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Silvercorp Metals and Aya Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Silvercorp Metals and Aya Gold

The main advantage of trading using opposite Silvercorp Metals and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.
The idea behind Silvercorp Metals and Aya Gold 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.
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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