Correlation Between MAG Silver and Tesla
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Tesla 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 Tesla 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 Tesla Inc CDR, you can compare the effects of market volatilities on MAG Silver and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Tesla.
Diversification Opportunities for MAG Silver and Tesla
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAG and Tesla is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Tesla Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc CDR has no effect on the direction of MAG Silver i.e., MAG Silver and Tesla go up and down completely randomly.
Pair Corralation between MAG Silver and Tesla
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 0.9 times more return on investment than Tesla. However, MAG Silver Corp is 1.11 times less risky than Tesla. It trades about 0.16 of its potential returns per unit of risk. Tesla Inc CDR is currently generating about 0.1 per unit of risk. If you would invest 2,078 in MAG Silver Corp on November 3, 2024 and sell it today you would earn a total of 206.00 from holding MAG Silver Corp or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. Tesla Inc CDR
Performance |
| Timeline |
| MAG Silver Corp |
| Tesla Inc CDR |
MAG Silver and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Tesla
The main advantage of trading using opposite MAG Silver and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla'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 |
| Tesla vs. Queens Road Capital | Tesla vs. CVW CleanTech | Tesla vs. Air Canada | Tesla vs. BluMetric Environmental |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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