Correlation Between MAG Silver and SSR Mining
Can any of the company-specific risk be diversified away by investing in both MAG Silver and SSR Mining 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 SSR Mining 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 SSR Mining, you can compare the effects of market volatilities on MAG Silver and SSR Mining 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 SSR Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and SSR Mining.
Diversification Opportunities for MAG Silver and SSR Mining
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MAG and SSR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and SSR Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Mining 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 SSR Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Mining has no effect on the direction of MAG Silver i.e., MAG Silver and SSR Mining go up and down completely randomly.
Pair Corralation between MAG Silver and SSR Mining
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 0.66 times more return on investment than SSR Mining. However, MAG Silver Corp is 1.52 times less risky than SSR Mining. It trades about 0.05 of its potential returns per unit of risk. SSR Mining is currently generating about -0.03 per unit of risk. If you would invest 1,444 in MAG Silver Corp on August 28, 2024 and sell it today you would earn a total of 673.00 from holding MAG Silver Corp or generate 46.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. SSR Mining
Performance |
| Timeline |
| MAG Silver Corp |
| SSR Mining |
MAG Silver and SSR Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and SSR Mining
The main advantage of trading using opposite MAG Silver and SSR Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, SSR Mining 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 SSR Mining will offset losses from the drop in SSR Mining'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 |
| SSR Mining vs. Pan American Silver | SSR Mining vs. MAG Silver Corp | SSR Mining vs. Osisko Gold Ro | SSR Mining vs. Sandstorm Gold Ltd |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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