Correlation Between Silvercorp Metals and Reyna Silver

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

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

Diversification Opportunities for Silvercorp Metals and Reyna Silver

-0.6

Correlation Coefficient

Silvercorp Metals  Reyna Silver

Excellent diversification

The 3 months correlation between Silvercorp and Reyna is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Reyna Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reyna Silver Corp 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 Reyna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reyna Silver Corp has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Reyna Silver go up and down completely randomly.

Pair Corralation between Silvercorp Metals and Reyna Silver

Considering the 90-day investment horizon Silvercorp Metals is expected to generate 0.64 times more return on investment than Reyna Silver. However, Silvercorp Metals is 1.57 times less risky than Reyna Silver. It trades about 0.06 of its potential returns per unit of risk. Reyna Silver Corp is currently generating about -0.18 per unit of risk. If you would invest  323.00  in Silvercorp Metals on December 1, 2024 and sell it today you would earn a total of  30.00  from holding Silvercorp Metals or generate 9.29% return on investment over 90 days.

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

Silvercorp Metals  vs.  Reyna Silver Corp

Silvercorp Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silvercorp Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Silvercorp Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Silvercorp Metals and Reyna Silver

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

The idea behind Silvercorp Metals and Reyna Silver Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.