Correlation Between MAG Silver and Apollo Silver
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Apollo Silver 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 Apollo Silver 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 Apollo Silver Corp, you can compare the effects of market volatilities on MAG Silver and Apollo Silver 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 Apollo Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Apollo Silver.
Diversification Opportunities for MAG Silver and Apollo Silver
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAG and Apollo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Apollo Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Silver 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 Apollo Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Silver Corp has no effect on the direction of MAG Silver i.e., MAG Silver and Apollo Silver go up and down completely randomly.
Pair Corralation between MAG Silver and Apollo Silver
Considering the 90-day investment horizon MAG Silver is expected to generate 2.73 times less return on investment than Apollo Silver. But when comparing it to its historical volatility, MAG Silver Corp is 2.49 times less risky than Apollo Silver. It trades about 0.05 of its potential returns per unit of risk. Apollo Silver Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Apollo Silver Corp on December 11, 2024 and sell it today you would earn a total of 6.00 from holding Apollo Silver Corp or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.35% |
| Values | Daily Returns |
MAG Silver Corp vs. Apollo Silver Corp
Performance |
| Timeline |
| MAG Silver Corp |
| Apollo Silver Corp |
MAG Silver and Apollo Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Apollo Silver
The main advantage of trading using opposite MAG Silver and Apollo Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Apollo Silver 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 Apollo Silver will offset losses from the drop in Apollo Silver's long position.| MAG Silver vs. Silvercorp Metals | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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