Correlation Between Silvercorp Metals and Dodge Cox

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

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

Diversification Opportunities for Silvercorp Metals and Dodge Cox

0.79

Correlation Coefficient

Silvercorp Metals  Dodge Cox

Poor diversification

The 3 months correlation between Silvercorp and Dodge is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Dodge Global Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Stock 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 Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Global Stock has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Dodge Cox go up and down completely randomly.

Pair Corralation between Silvercorp Metals and Dodge Cox

Considering the 90-day investment horizon Silvercorp Metals is expected to generate 4.01 times more return on investment than Dodge Cox. However, Silvercorp Metals is 4.01 times more volatile than Dodge Global Stock. It trades about 0.16 of its potential returns per unit of risk. Dodge Global Stock is currently generating about 0.13 per unit of risk. 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Silvercorp Metals  vs.  Dodge Global Stock

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.

Dodge Global Stock

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Global Stock are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dodge Cox may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Silvercorp Metals and Dodge Cox

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

The idea behind Silvercorp Metals and Dodge Global Stock 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.