Correlation Between MAG Silver and Global Ship
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Global Ship 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 Global Ship 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 Global Ship Lease, you can compare the effects of market volatilities on MAG Silver and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Global Ship.
Diversification Opportunities for MAG Silver and Global Ship
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAG and Global is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of MAG Silver i.e., MAG Silver and Global Ship go up and down completely randomly.
Pair Corralation between MAG Silver and Global Ship
Assuming the 90 days horizon MAG Silver Corp is expected to generate 1.63 times more return on investment than Global Ship. However, MAG Silver is 1.63 times more volatile than Global Ship Lease. It trades about 0.07 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.08 per unit of risk. If you would invest 1,092 in MAG Silver Corp on October 30, 2024 and sell it today you would earn a total of 308.00 from holding MAG Silver Corp or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. Global Ship Lease
Performance |
| Timeline |
| MAG Silver Corp |
| Global Ship Lease |
MAG Silver and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Global Ship
The main advantage of trading using opposite MAG Silver and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| MAG Silver vs. Endeavour Silver Corp | MAG Silver vs. Americas Gold and | MAG Silver vs. Superior Plus Corp | MAG Silver vs. Origin Agritech |
| Global Ship vs. NorAm Drilling AS | Global Ship vs. Mitsui Chemicals | Global Ship vs. TIANDE CHEMICAL | Global Ship vs. Sekisui Chemical Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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