Correlation Between MAG Silver and Salesforce
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Salesforce 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 Salesforce 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 Salesforce, you can compare the effects of market volatilities on MAG Silver and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Salesforce.
Diversification Opportunities for MAG Silver and Salesforce
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAG and Salesforce is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of MAG Silver i.e., MAG Silver and Salesforce go up and down completely randomly.
Pair Corralation between MAG Silver and Salesforce
Assuming the 90 days horizon MAG Silver Corp is expected to generate 2.63 times more return on investment than Salesforce. However, MAG Silver is 2.63 times more volatile than Salesforce. It trades about 0.23 of its potential returns per unit of risk. Salesforce is currently generating about -0.07 per unit of risk. If you would invest 1,318 in MAG Silver Corp on October 28, 2024 and sell it today you would earn a total of 141.00 from holding MAG Silver Corp or generate 10.7% 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. Salesforce
Performance |
| Timeline |
| MAG Silver Corp |
| Salesforce |
MAG Silver and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Salesforce
The main advantage of trading using opposite MAG Silver and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| MAG Silver vs. ANTA SPORTS PRODUCT | MAG Silver vs. GMO Internet | MAG Silver vs. ZINC MEDIA GR | MAG Silver vs. Wayside Technology Group |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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