Correlation Between MAG SILVER and ANGLO ASIAN
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and ANGLO ASIAN 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 ANGLO ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and ANGLO ASIAN MINING, you can compare the effects of market volatilities on MAG SILVER and ANGLO ASIAN 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 ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and ANGLO ASIAN.
Diversification Opportunities for MAG SILVER and ANGLO ASIAN
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between MAG and ANGLO is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING 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 ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of MAG SILVER i.e., MAG SILVER and ANGLO ASIAN go up and down completely randomly.
Pair Corralation between MAG SILVER and ANGLO ASIAN
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.2 times more return on investment than ANGLO ASIAN. However, MAG SILVER is 1.2 times more volatile than ANGLO ASIAN MINING. It trades about 0.21 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.1 per unit of risk. If you would invest 1,395 in MAG SILVER on November 4, 2024 and sell it today you would earn a total of 188.00 from holding MAG SILVER or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. ANGLO ASIAN MINING
Performance |
| Timeline |
| MAG SILVER |
| ANGLO ASIAN MINING |
MAG SILVER and ANGLO ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and ANGLO ASIAN
The main advantage of trading using opposite MAG SILVER and ANGLO ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, ANGLO ASIAN 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 ANGLO ASIAN will offset losses from the drop in ANGLO ASIAN's long position.| MAG SILVER vs. Spirent Communications plc | MAG SILVER vs. Chengdu PUTIAN Telecommunications | MAG SILVER vs. ITALIAN WINE BRANDS | MAG SILVER vs. Ross Stores |
| ANGLO ASIAN vs. United Natural Foods | ANGLO ASIAN vs. PROSIEBENSAT1 MEDIADR4 | ANGLO ASIAN vs. NH Foods | ANGLO ASIAN vs. Hollywood Bowl Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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