Correlation Between MAG Silver and X FAB
Can any of the company-specific risk be diversified away by investing in both MAG Silver and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on MAG Silver and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and X FAB.
Diversification Opportunities for MAG Silver and X FAB
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and XFB is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of MAG Silver i.e., MAG Silver and X FAB go up and down completely randomly.
Pair Corralation between MAG Silver and X FAB
Assuming the 90 days horizon MAG Silver Corp is expected to under-perform the X FAB. But the stock apears to be less risky and, when comparing its historical volatility, MAG Silver Corp is 1.29 times less risky than X FAB. The stock trades about -0.09 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 500.00 in X FAB Silicon Foundries on October 16, 2024 and sell it today you would earn a total of 1.00 from holding X FAB Silicon Foundries or generate 0.2% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| MAG Silver Corp |
| X FAB Silicon |
MAG Silver and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and X FAB
The main advantage of trading using opposite MAG Silver and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| MAG Silver vs. X FAB Silicon Foundries | MAG Silver vs. PEPTONIC MEDICAL | MAG Silver vs. GLOBUS MEDICAL A | MAG Silver vs. Easy Software AG |
| X FAB vs. CHRYSALIS INVESTMENTS LTD | X FAB vs. JLF INVESTMENT | X FAB vs. Playa Hotels Resorts | X FAB vs. Hyatt Hotels |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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