Correlation Between MAG Silver and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both MAG Silver and SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals, you can compare the effects of market volatilities on MAG Silver and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and SilverCrest Metals.
Diversification Opportunities for MAG Silver and SilverCrest Metals
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MAG and SilverCrest is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of MAG Silver i.e., MAG Silver and SilverCrest Metals go up and down completely randomly.
Pair Corralation between MAG Silver and SilverCrest Metals
Assuming the 90 days trading horizon MAG Silver Corp is expected to under-perform the SilverCrest Metals. But the stock apears to be less risky and, when comparing its historical volatility, MAG Silver Corp is 1.61 times less risky than SilverCrest Metals. The stock trades about -0.25 of its potential returns per unit of risk. The SilverCrest Metals is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,484 in SilverCrest Metals on August 29, 2024 and sell it today you would lose (79.00) from holding SilverCrest Metals or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. SilverCrest Metals
Performance |
| Timeline |
| MAG Silver Corp |
| SilverCrest Metals |
MAG Silver and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and SilverCrest Metals
The main advantage of trading using opposite MAG Silver and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' 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 |
| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox Gold Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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