Correlation Between MAG Silver and Medicus Pharma
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Medicus Pharma 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 Medicus Pharma 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 Medicus Pharma, you can compare the effects of market volatilities on MAG Silver and Medicus Pharma 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 Medicus Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Medicus Pharma.
Diversification Opportunities for MAG Silver and Medicus Pharma
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAG and Medicus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Medicus Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicus Pharma 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 Medicus Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicus Pharma has no effect on the direction of MAG Silver i.e., MAG Silver and Medicus Pharma go up and down completely randomly.
Pair Corralation between MAG Silver and Medicus Pharma
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 8.97 times more return on investment than Medicus Pharma. However, MAG Silver is 8.97 times more volatile than Medicus Pharma. It trades about 0.2 of its potential returns per unit of risk. Medicus Pharma is currently generating about 0.18 per unit of risk. If you would invest 2,000 in MAG Silver Corp on October 22, 2024 and sell it today you would earn a total of 194.00 from holding MAG Silver Corp or generate 9.7% 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. Medicus Pharma
Performance |
| Timeline |
| MAG Silver Corp |
| Medicus Pharma |
MAG Silver and Medicus Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Medicus Pharma
The main advantage of trading using opposite MAG Silver and Medicus Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Medicus Pharma 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 Medicus Pharma will offset losses from the drop in Medicus Pharma'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 |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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