Correlation Between SYSTEMAIR and MAG SILVER
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR 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 SYSTEMAIR and MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and MAG SILVER, you can compare the effects of market volatilities on SYSTEMAIR 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 SYSTEMAIR with a short position of MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and MAG SILVER.
Diversification Opportunities for SYSTEMAIR and MAG SILVER
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SYSTEMAIR and MAG is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER and SYSTEMAIR 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 SYSTEMAIR AB 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 has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and MAG SILVER go up and down completely randomly.
Pair Corralation between SYSTEMAIR and MAG SILVER
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to under-perform the MAG SILVER. But the stock apears to be less risky and, when comparing its historical volatility, SYSTEMAIR AB is 2.64 times less risky than MAG SILVER. The stock trades about -0.57 of its potential returns per unit of risk. The MAG SILVER is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,397 in MAG SILVER on October 19, 2024 and sell it today you would earn a total of 82.00 from holding MAG SILVER or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SYSTEMAIR AB vs. MAG SILVER
Performance |
| Timeline |
| SYSTEMAIR AB |
| MAG SILVER |
SYSTEMAIR and MAG SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and MAG SILVER
The main advantage of trading using opposite SYSTEMAIR and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR 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.| SYSTEMAIR vs. MOVIE GAMES SA | SYSTEMAIR vs. TROPHY GAMES DEV | SYSTEMAIR vs. FRACTAL GAMING GROUP | SYSTEMAIR vs. CONTAGIOUS GAMING INC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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