Correlation Between MAG Silver and Pfizer
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Pfizer 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 Pfizer 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 Pfizer Inc CDR, you can compare the effects of market volatilities on MAG Silver and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Pfizer.
Diversification Opportunities for MAG Silver and Pfizer
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and Pfizer is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Pfizer Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc CDR has no effect on the direction of MAG Silver i.e., MAG Silver and Pfizer go up and down completely randomly.
Pair Corralation between MAG Silver and Pfizer
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 1.96 times more return on investment than Pfizer. However, MAG Silver is 1.96 times more volatile than Pfizer Inc CDR. It trades about 0.17 of its potential returns per unit of risk. Pfizer Inc CDR is currently generating about -0.07 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. Pfizer Inc CDR
Performance |
| Timeline |
| MAG Silver Corp |
| Pfizer Inc CDR |
MAG Silver and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Pfizer
The main advantage of trading using opposite MAG Silver and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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