Correlation Between Addtech AB and MAG SILVER
Can any of the company-specific risk be diversified away by investing in both Addtech AB 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 Addtech AB and MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and MAG SILVER, you can compare the effects of market volatilities on Addtech AB 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 Addtech AB with a short position of MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and MAG SILVER.
Diversification Opportunities for Addtech AB and MAG SILVER
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addtech and MAG is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER and Addtech AB 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 Addtech 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 Addtech AB i.e., Addtech AB and MAG SILVER go up and down completely randomly.
Pair Corralation between Addtech AB and MAG SILVER
Assuming the 90 days trading horizon Addtech AB is expected to generate 3.4 times less return on investment than MAG SILVER. But when comparing it to its historical volatility, Addtech AB is 1.27 times less risky than MAG SILVER. It trades about 0.03 of its potential returns per unit of risk. MAG SILVER is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,209 in MAG SILVER on October 25, 2024 and sell it today you would earn a total of 236.00 from holding MAG SILVER or generate 19.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. MAG SILVER
Performance |
| Timeline |
| Addtech AB |
| MAG SILVER |
Addtech AB and MAG SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and MAG SILVER
The main advantage of trading using opposite Addtech AB and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB 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.| Addtech AB vs. Fastenal Company | Addtech AB vs. Indutrade AB | Addtech AB vs. Superior Plus Corp | Addtech AB vs. Origin Agritech |
| MAG SILVER vs. Summit Hotel Properties | MAG SILVER vs. Tower Semiconductor | MAG SILVER vs. UNIVMUSIC GRPADR050 | MAG SILVER vs. BE Semiconductor Industries |
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.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |