Correlation Between MAG SILVER and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and ITALIAN WINE 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 ITALIAN WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and ITALIAN WINE BRANDS, you can compare the effects of market volatilities on MAG SILVER and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and ITALIAN WINE.
Diversification Opportunities for MAG SILVER and ITALIAN WINE
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and ITALIAN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of MAG SILVER i.e., MAG SILVER and ITALIAN WINE go up and down completely randomly.
Pair Corralation between MAG SILVER and ITALIAN WINE
Assuming the 90 days trading horizon MAG SILVER is expected to generate 0.75 times more return on investment than ITALIAN WINE. However, MAG SILVER is 1.33 times less risky than ITALIAN WINE. It trades about 0.24 of its potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about -0.06 per unit of risk. If you would invest 1,336 in MAG SILVER on October 24, 2024 and sell it today you would earn a total of 141.00 from holding MAG SILVER or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| MAG SILVER |
| ITALIAN WINE BRANDS |
MAG SILVER and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and ITALIAN WINE
The main advantage of trading using opposite MAG SILVER and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.| MAG SILVER vs. ATRESMEDIA | MAG SILVER vs. The Trade Desk | MAG SILVER vs. PENN Entertainment | MAG SILVER vs. SALESFORCE INC CDR |
| ITALIAN WINE vs. CITIC Telecom International | ITALIAN WINE vs. MAG SILVER | ITALIAN WINE vs. Cairo Communication SpA | ITALIAN WINE vs. MINCO SILVER |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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