Correlation Between MAG Silver and National Bank
Can any of the company-specific risk be diversified away by investing in both MAG Silver and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on MAG Silver and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and National Bank.
Diversification Opportunities for MAG Silver and National Bank
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and National is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of MAG Silver i.e., MAG Silver and National Bank go up and down completely randomly.
Pair Corralation between MAG Silver and National Bank
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 5.11 times more return on investment than National Bank. However, MAG Silver is 5.11 times more volatile than National Bank of. It trades about 0.16 of its potential returns per unit of risk. National Bank of is currently generating about -0.02 per unit of risk. If you would invest 2,007 in MAG Silver Corp on October 25, 2024 and sell it today you would earn a total of 157.00 from holding MAG Silver Corp or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. National Bank of
Performance |
| Timeline |
| MAG Silver Corp |
| National Bank |
MAG Silver and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and National Bank
The main advantage of trading using opposite MAG Silver and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank'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 |
| National Bank vs. Canlan Ice Sports | National Bank vs. InPlay Oil Corp | National Bank vs. Mako Mining Corp | National Bank vs. TGS Esports |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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