Correlation Between MAG Silver and GOLDMAN SACHS
Can any of the company-specific risk be diversified away by investing in both MAG Silver and GOLDMAN SACHS 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 MAG Silver and GOLDMAN SACHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and GOLDMAN SACHS CDR, you can compare the effects of market volatilities on MAG Silver and GOLDMAN SACHS 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 MAG Silver with a short position of GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and GOLDMAN SACHS.
Diversification Opportunities for MAG Silver and GOLDMAN SACHS
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAG and GOLDMAN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR and MAG Silver 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 MAG Silver Corp are associated (or correlated) with GOLDMAN SACHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDMAN SACHS CDR has no effect on the direction of MAG Silver i.e., MAG Silver and GOLDMAN SACHS go up and down completely randomly.
Pair Corralation between MAG Silver and GOLDMAN SACHS
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 1.24 times more return on investment than GOLDMAN SACHS. However, MAG Silver is 1.24 times more volatile than GOLDMAN SACHS CDR. It trades about 0.17 of its potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about 0.17 per unit of risk. If you would invest 1,653 in MAG Silver Corp on September 3, 2024 and sell it today you would earn a total of 527.00 from holding MAG Silver Corp or generate 31.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. GOLDMAN SACHS CDR
Performance |
| Timeline |
| MAG Silver Corp |
| GOLDMAN SACHS CDR |
MAG Silver and GOLDMAN SACHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and GOLDMAN SACHS
The main advantage of trading using opposite MAG Silver and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, GOLDMAN SACHS 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 GOLDMAN SACHS will offset losses from the drop in GOLDMAN SACHS's long position.| MAG Silver vs. Pan American Silver | MAG Silver vs. Endeavour Silver Corp | MAG Silver vs. SSR Mining | MAG Silver vs. Osisko Gold Ro |
| GOLDMAN SACHS vs. MAG Silver Corp | GOLDMAN SACHS vs. Electra Battery Materials | GOLDMAN SACHS vs. Marimaca Copper Corp | GOLDMAN SACHS vs. Monument Mining Limited |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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