Correlation Between Dolly Varden and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Dolly Varden 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 Dolly Varden and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolly Varden Silver and MAG Silver Corp, you can compare the effects of market volatilities on Dolly Varden 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 Dolly Varden with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolly Varden and MAG Silver.
Diversification Opportunities for Dolly Varden and MAG Silver
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dolly and MAG is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dolly Varden Silver 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 Dolly Varden 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 Dolly Varden Silver 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 Dolly Varden i.e., Dolly Varden and MAG Silver go up and down completely randomly.
Pair Corralation between Dolly Varden and MAG Silver
Assuming the 90 days trading horizon Dolly Varden Silver is expected to under-perform the MAG Silver. In addition to that, Dolly Varden is 2.73 times more volatile than MAG Silver Corp. It trades about -0.09 of its total potential returns per unit of risk. MAG Silver Corp is currently generating about -0.2 per unit of volatility. If you would invest 1,479 in MAG Silver Corp on September 23, 2024 and sell it today you would lose (165.00) from holding MAG Silver Corp or give up 11.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolly Varden Silver vs. MAG Silver Corp
Performance |
| Timeline |
| Dolly Varden Silver |
| MAG Silver Corp |
Dolly Varden and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolly Varden and MAG Silver
The main advantage of trading using opposite Dolly Varden and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolly Varden 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.| Dolly Varden vs. Sumitomo Mitsui Construction | Dolly Varden vs. Chongqing Machinery Electric | Dolly Varden vs. TITAN MACHINERY | Dolly Varden vs. H FARM SPA |
| MAG Silver vs. Pan American Silver | MAG Silver vs. First Majestic Silver | MAG Silver vs. Silvercorp Metals | MAG Silver vs. Endeavour Silver Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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