Correlation Between MAG SILVER and Cass Information
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and Cass Information 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 Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Cass Information Systems, you can compare the effects of market volatilities on MAG SILVER and Cass Information 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 Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Cass Information.
Diversification Opportunities for MAG SILVER and Cass Information
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MAG and Cass is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems 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 Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of MAG SILVER i.e., MAG SILVER and Cass Information go up and down completely randomly.
Pair Corralation between MAG SILVER and Cass Information
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.46 times more return on investment than Cass Information. However, MAG SILVER is 1.46 times more volatile than Cass Information Systems. It trades about 0.12 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.06 per unit of risk. If you would invest 1,097 in MAG SILVER on November 7, 2024 and sell it today you would earn a total of 443.00 from holding MAG SILVER or generate 40.38% 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. Cass Information Systems
Performance |
| Timeline |
| MAG SILVER |
| Cass Information Systems |
MAG SILVER and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Cass Information
The main advantage of trading using opposite MAG SILVER and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| MAG SILVER vs. SIVERS SEMICONDUCTORS AB | MAG SILVER vs. NorAm Drilling AS | MAG SILVER vs. Volkswagen AG | MAG SILVER vs. Darden Restaurants |
| Cass Information vs. INFORMATION SVC GRP | Cass Information vs. Ribbon Communications | Cass Information vs. Highlight Communications AG | Cass Information vs. Pure Storage |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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