Correlation Between Blackrock World and Silvercorp Metals

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

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

Diversification Opportunities for Blackrock World and Silvercorp Metals

0.75

Correlation Coefficient

Blackrock World  Silvercorp Metals

Poor diversification

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

Pair Corralation between Blackrock World and Silvercorp Metals

Assuming the 90 days trading horizon Blackrock World Mining is expected to generate 0.41 times more return on investment than Silvercorp Metals. However, Blackrock World Mining is 2.47 times less risky than Silvercorp Metals. It trades about 0.04 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.0 per unit of risk. If you would invest  49,209  in Blackrock World Mining on September 3, 2024 and sell it today you would earn a total of  1,691  from holding Blackrock World Mining or generate 3.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Blackrock World Mining  vs.  Silvercorp Metals

Blackrock World Mining

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock World Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Blackrock World is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Blackrock World and Silvercorp Metals

The main advantage of trading using opposite Blackrock World and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock World 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 Blackrock World Mining 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.