Correlation Between MAG Silver and TC Energy
Can any of the company-specific risk be diversified away by investing in both MAG Silver and TC Energy 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 TC Energy 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 TC Energy Corp, you can compare the effects of market volatilities on MAG Silver and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and TC Energy.
Diversification Opportunities for MAG Silver and TC Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and TRP-PB is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and TC Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy Corp 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy Corp has no effect on the direction of MAG Silver i.e., MAG Silver and TC Energy go up and down completely randomly.
Pair Corralation between MAG Silver and TC Energy
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 3.87 times more return on investment than TC Energy. However, MAG Silver is 3.87 times more volatile than TC Energy Corp. It trades about 0.25 of its potential returns per unit of risk. TC Energy Corp is currently generating about 0.45 per unit of risk. If you would invest 2,026 in MAG Silver Corp on November 5, 2024 and sell it today you would earn a total of 302.00 from holding MAG Silver Corp or generate 14.91% 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. TC Energy Corp
Performance |
| Timeline |
| MAG Silver Corp |
| TC Energy Corp |
MAG Silver and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and TC Energy
The main advantage of trading using opposite MAG Silver and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy'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 |
| TC Energy vs. Doman Building Materials | TC Energy vs. Advent Wireless | TC Energy vs. Brookfield Office Properties | TC Energy vs. QC Copper and |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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