Correlation Between Silvercorp Metals and Bisichi Mining

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

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

Diversification Opportunities for Silvercorp Metals and Bisichi Mining

0.56

Correlation Coefficient

Silvercorp Metals  Bisichi Mining

Very weak diversification

The 3 months correlation between Silvercorp and Bisichi is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals and Bisichi Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisichi Mining PLC 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 Bisichi Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisichi Mining PLC has no effect on the direction of Silvercorp Metals i.e., Silvercorp Metals and Bisichi Mining go up and down completely randomly.

Pair Corralation between Silvercorp Metals and Bisichi Mining

Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 1.38 times less return on investment than Bisichi Mining. In addition to that, Silvercorp Metals is 1.53 times more volatile than Bisichi Mining PLC. It trades about 0.01 of its total potential returns per unit of risk. Bisichi Mining PLC is currently generating about 0.03 per unit of volatility. If you would invest  10,750  in Bisichi Mining PLC on September 4, 2024 and sell it today you would earn a total of  250.00  from holding Bisichi Mining PLC or generate 2.33% return on investment over 90 days.

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

Silvercorp Metals  vs.  Bisichi Mining PLC

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 comparatively stable basic indicators, Silvercorp Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bisichi Mining PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bisichi Mining PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bisichi Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Silvercorp Metals and Bisichi Mining

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

The idea behind Silvercorp Metals and Bisichi Mining PLC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.