Correlation Between MAG SILVER and LANXESS Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and LANXESS Aktiengesellschaft, you can compare the effects of market volatilities on MAG SILVER and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and LANXESS Aktiengesellscha.
Diversification Opportunities for MAG SILVER and LANXESS Aktiengesellscha
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAG and LANXESS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and LANXESS Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANXESS Aktiengesellscha has no effect on the direction of MAG SILVER i.e., MAG SILVER and LANXESS Aktiengesellscha go up and down completely randomly.
Pair Corralation between MAG SILVER and LANXESS Aktiengesellscha
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.13 times more return on investment than LANXESS Aktiengesellscha. However, MAG SILVER is 1.13 times more volatile than LANXESS Aktiengesellschaft. It trades about 0.19 of its potential returns per unit of risk. LANXESS Aktiengesellschaft is currently generating about 0.13 per unit of risk. If you would invest 1,332 in MAG SILVER on October 25, 2024 and sell it today you would earn a total of 113.00 from holding MAG SILVER or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
MAG SILVER vs. LANXESS Aktiengesellschaft
Performance |
| Timeline |
| MAG SILVER |
| LANXESS Aktiengesellscha |
MAG SILVER and LANXESS Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and LANXESS Aktiengesellscha
The main advantage of trading using opposite MAG SILVER and LANXESS Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha will offset losses from the drop in LANXESS Aktiengesellscha's long position.| MAG SILVER vs. Summit Hotel Properties | MAG SILVER vs. Tower Semiconductor | MAG SILVER vs. UNIVMUSIC GRPADR050 | MAG SILVER vs. BE Semiconductor Industries |
| LANXESS Aktiengesellscha vs. EPSILON HEALTHCARE LTD | LANXESS Aktiengesellscha vs. CVS Health | LANXESS Aktiengesellscha vs. AOI Electronics Co | LANXESS Aktiengesellscha vs. Delta Electronics Public |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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