Correlation Between Electra Battery and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Electra Battery 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 Electra Battery and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Battery Materials and MAG Silver Corp, you can compare the effects of market volatilities on Electra Battery 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 Electra Battery with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and MAG Silver.
Diversification Opportunities for Electra Battery and MAG Silver
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electra and MAG is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials 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 Electra Battery 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 Electra Battery Materials 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 Electra Battery i.e., Electra Battery and MAG Silver go up and down completely randomly.
Pair Corralation between Electra Battery and MAG Silver
Assuming the 90 days trading horizon Electra Battery Materials is expected to under-perform the MAG Silver. In addition to that, Electra Battery is 1.39 times more volatile than MAG Silver Corp. It trades about -0.19 of its total potential returns per unit of risk. MAG Silver Corp is currently generating about 0.12 per unit of volatility. If you would invest 2,071 in MAG Silver Corp on September 14, 2024 and sell it today you would earn a total of 107.00 from holding MAG Silver Corp or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. MAG Silver Corp
Performance |
| Timeline |
| Electra Battery Materials |
| MAG Silver Corp |
Electra Battery and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and MAG Silver
The main advantage of trading using opposite Electra Battery and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery 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.| Electra Battery vs. Foraco International SA | Electra Battery vs. Geodrill Limited | Electra Battery vs. Major Drilling Group | Electra Battery vs. Bri Chem Corp |
| MAG Silver vs. Arizona Sonoran Copper | MAG Silver vs. Marimaca Copper Corp | MAG Silver vs. World Copper | MAG Silver vs. QC Copper and |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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