Correlation Between Global Ship and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Global Ship and MAG 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 Global Ship and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and MAG Silver Corp, you can compare the effects of market volatilities on Global Ship and MAG 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 Global Ship with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and MAG Silver.
Diversification Opportunities for Global Ship and MAG Silver
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and MAG is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp and Global Ship 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 Global Ship Lease are associated (or correlated) with MAG Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Silver Corp has no effect on the direction of Global Ship i.e., Global Ship and MAG Silver go up and down completely randomly.
Pair Corralation between Global Ship and MAG Silver
Assuming the 90 days horizon Global Ship Lease is expected to generate 0.58 times more return on investment than MAG Silver. However, Global Ship Lease is 1.74 times less risky than MAG Silver. It trades about 0.06 of its potential returns per unit of risk. MAG Silver Corp is currently generating about 0.01 per unit of risk. If you would invest 1,433 in Global Ship Lease on October 16, 2024 and sell it today you would earn a total of 741.00 from holding Global Ship Lease or generate 51.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. MAG Silver Corp
Performance |
| Timeline |
| Global Ship Lease |
| MAG Silver Corp |
Global Ship and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and MAG Silver
The main advantage of trading using opposite Global Ship and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, MAG 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 MAG Silver will offset losses from the drop in MAG Silver's long position.| Global Ship vs. EBRO FOODS | Global Ship vs. COVIVIO HOTELS INH | Global Ship vs. Astral Foods Limited | Global Ship vs. Cal Maine Foods |
| MAG Silver vs. Global Ship Lease | MAG Silver vs. ALBIS LEASING AG | MAG Silver vs. GigaMedia | MAG Silver vs. DETALION GAMES SA |
Check out your portfolio center.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.
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