Correlation Between MAG Silver and Nutrien
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Nutrien 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 Nutrien 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 Nutrien, you can compare the effects of market volatilities on MAG Silver and Nutrien 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 Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Nutrien.
Diversification Opportunities for MAG Silver and Nutrien
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAG and Nutrien is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of MAG Silver i.e., MAG Silver and Nutrien go up and down completely randomly.
Pair Corralation between MAG Silver and Nutrien
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 1.47 times more return on investment than Nutrien. However, MAG Silver is 1.47 times more volatile than Nutrien. It trades about 0.01 of its potential returns per unit of risk. Nutrien is currently generating about -0.03 per unit of risk. If you would invest 2,176 in MAG Silver Corp on September 13, 2024 and sell it today you would earn a total of 2.00 from holding MAG Silver Corp or generate 0.09% 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. Nutrien
Performance |
| Timeline |
| MAG Silver Corp |
| Nutrien |
MAG Silver and Nutrien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Nutrien
The main advantage of trading using opposite MAG Silver and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien'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 |
| Nutrien vs. Arbor Metals Corp | Nutrien vs. Northstar Clean Technologies | Nutrien vs. Western Copper and | Nutrien vs. Firan Technology Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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