Correlation Between MAG SILVER and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and MGIC INVESTMENT 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 MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and MGIC INVESTMENT, you can compare the effects of market volatilities on MAG SILVER and MGIC INVESTMENT 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 MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and MGIC INVESTMENT.
Diversification Opportunities for MAG SILVER and MGIC INVESTMENT
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between MAG and MGIC is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT 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 MGIC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC INVESTMENT has no effect on the direction of MAG SILVER i.e., MAG SILVER and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between MAG SILVER and MGIC INVESTMENT
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.62 times less return on investment than MGIC INVESTMENT. In addition to that, MAG SILVER is 2.09 times more volatile than MGIC INVESTMENT. It trades about 0.03 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.11 per unit of volatility. If you would invest 1,261 in MGIC INVESTMENT on November 7, 2024 and sell it today you would earn a total of 1,179 from holding MGIC INVESTMENT or generate 93.5% 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. MGIC INVESTMENT
Performance |
| Timeline |
| MAG SILVER |
| MGIC INVESTMENT |
MAG SILVER and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and MGIC INVESTMENT
The main advantage of trading using opposite MAG SILVER and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, MGIC INVESTMENT 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 MGIC INVESTMENT will offset losses from the drop in MGIC INVESTMENT'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 |
| MGIC INVESTMENT vs. Taiwan Semiconductor Manufacturing | MGIC INVESTMENT vs. SBM OFFSHORE | MGIC INVESTMENT vs. Semiconductor Manufacturing International | MGIC INVESTMENT vs. ON SEMICONDUCTOR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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