Correlation Between Ecclesiastical Insurance and Silvercorp Metals

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

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

Diversification Opportunities for Ecclesiastical Insurance and Silvercorp Metals

0.29

Correlation Coefficient

Ecclesiastical Insurance  Silvercorp Metals

Modest diversification

The 3 months correlation between Ecclesiastical and Silvercorp is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Silvercorp Metals go up and down completely randomly.

Pair Corralation between Ecclesiastical Insurance and Silvercorp Metals

Assuming the 90 days trading horizon Ecclesiastical Insurance is expected to generate 2.28 times less return on investment than Silvercorp Metals. But when comparing it to its historical volatility, Ecclesiastical Insurance Office is 3.94 times less risky than Silvercorp Metals. It trades about 0.05 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  405.00  in Silvercorp Metals on September 18, 2024 and sell it today you would earn a total of  58.00  from holding Silvercorp Metals or generate 14.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.77%
Values	Daily Returns

Ecclesiastical Insurance Offic  vs.  Silvercorp Metals

Ecclesiastical Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecclesiastical Insurance Office has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ecclesiastical Insurance 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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ecclesiastical Insurance and Silvercorp Metals

The main advantage of trading using opposite Ecclesiastical Insurance and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Stocks Directory module to find actively traded stocks across global markets.