Correlation Between MAG SILVER and Prosafe SE
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and Prosafe SE 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 Prosafe SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Prosafe SE, you can compare the effects of market volatilities on MAG SILVER and Prosafe SE 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 Prosafe SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Prosafe SE.
Diversification Opportunities for MAG SILVER and Prosafe SE
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAG and Prosafe is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE 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 are associated (or correlated) with Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of MAG SILVER i.e., MAG SILVER and Prosafe SE go up and down completely randomly.
Pair Corralation between MAG SILVER and Prosafe SE
Assuming the 90 days trading horizon MAG SILVER is expected to generate 5.18 times less return on investment than Prosafe SE. But when comparing it to its historical volatility, MAG SILVER is 7.61 times less risky than Prosafe SE. It trades about 0.17 of its potential returns per unit of risk. Prosafe SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Prosafe SE on November 5, 2024 and sell it today you would earn a total of 10.00 from holding Prosafe SE or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. Prosafe SE
Performance |
| Timeline |
| MAG SILVER |
| Prosafe SE |
MAG SILVER and Prosafe SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Prosafe SE
The main advantage of trading using opposite MAG SILVER and Prosafe SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, Prosafe SE 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 Prosafe SE will offset losses from the drop in Prosafe SE's long position.| MAG SILVER vs. Pebblebrook Hotel Trust | MAG SILVER vs. Wyndham Hotels Resorts | MAG SILVER vs. NORWEGIAN AIR SHUT | MAG SILVER vs. LAir Liquide SA |
| Prosafe SE vs. G8 EDUCATION | Prosafe SE vs. DeVry Education Group | Prosafe SE vs. EEDUCATION ALBERT AB | Prosafe SE vs. Magic Software Enterprises |
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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