Correlation Between MAG SILVER and Gaming
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and Gaming 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 Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Gaming and Leisure, you can compare the effects of market volatilities on MAG SILVER and Gaming 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 Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Gaming.
Diversification Opportunities for MAG SILVER and Gaming
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MAG and Gaming is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure 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 Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of MAG SILVER i.e., MAG SILVER and Gaming go up and down completely randomly.
Pair Corralation between MAG SILVER and Gaming
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.68 times more return on investment than Gaming. However, MAG SILVER is 1.68 times more volatile than Gaming and Leisure. It trades about 0.0 of its potential returns per unit of risk. Gaming and Leisure is currently generating about -0.11 per unit of risk. If you would invest 1,456 in MAG SILVER on October 30, 2024 and sell it today you would lose (14.00) from holding MAG SILVER or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. Gaming and Leisure
Performance |
| Timeline |
| MAG SILVER |
| Gaming and Leisure |
MAG SILVER and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Gaming
The main advantage of trading using opposite MAG SILVER and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| MAG SILVER vs. Japan Medical Dynamic | MAG SILVER vs. MEDICAL FACILITIES NEW | MAG SILVER vs. Advanced Medical Solutions | MAG SILVER vs. Genertec Universal Medical |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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