Correlation Between Eros Resources and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Eros Resources 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 Eros Resources and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eros Resources Corp and MAG Silver Corp, you can compare the effects of market volatilities on Eros Resources 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 Eros Resources with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eros Resources and MAG Silver.
Diversification Opportunities for Eros Resources and MAG Silver
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eros and MAG is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eros Resources Corp 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 Eros Resources 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 Eros Resources Corp 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 Eros Resources i.e., Eros Resources and MAG Silver go up and down completely randomly.
Pair Corralation between Eros Resources and MAG Silver
Assuming the 90 days horizon Eros Resources Corp is expected to under-perform the MAG Silver. In addition to that, Eros Resources is 3.63 times more volatile than MAG Silver Corp. It trades about -0.17 of its total potential returns per unit of risk. MAG Silver Corp is currently generating about 0.11 per unit of volatility. If you would invest 2,118 in MAG Silver Corp on September 12, 2024 and sell it today you would earn a total of 103.00 from holding MAG Silver Corp or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eros Resources Corp vs. MAG Silver Corp
Performance |
| Timeline |
| Eros Resources Corp |
| MAG Silver Corp |
Eros Resources and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eros Resources and MAG Silver
The main advantage of trading using opposite Eros Resources and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eros Resources 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.| Eros Resources vs. Quorum Information Technologies | Eros Resources vs. TGS Esports | Eros Resources vs. Renoworks Software | Eros Resources vs. Questor Technology |
| MAG Silver vs. Pan American Silver | MAG Silver vs. Endeavour Silver Corp | MAG Silver vs. SSR Mining | MAG Silver vs. Osisko Gold Ro |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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