Correlation Between MAG SILVER and TELE2 -B-

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Can any of the company-specific risk be diversified away by investing in both MAG SILVER and TELE2 -B- 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 TELE2 -B- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and TELE2 B , you can compare the effects of market volatilities on MAG SILVER and TELE2 -B- 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 TELE2 -B-. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and TELE2 -B-.

Diversification Opportunities for MAG SILVER and TELE2 -B-

MAGTELE2Diversified AwayMAGTELE2Diversified Away100%
0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between MAG and TELE2 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 -B- 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 TELE2 -B-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 -B- has no effect on the direction of MAG SILVER i.e., MAG SILVER and TELE2 -B- go up and down completely randomly.

Pair Corralation between MAG SILVER and TELE2 -B-

Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.08 times less return on investment than TELE2 -B-. In addition to that, MAG SILVER is 3.52 times more volatile than TELE2 B . It trades about 0.14 of its total potential returns per unit of risk. TELE2 B is currently generating about 0.52 per unit of volatility. If you would invest  1,051  in TELE2 B on November 30, 2024 and sell it today you would earn a total of  97.00  from holding TELE2 B or generate 9.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

MAG SILVER  vs.  TELE2 B

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15MQ8 NCYD
       Timeline  
MAG SILVER 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MAG SILVER are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MAG SILVER is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.51414.51515.51616.517
TELE2 -B- 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TELE2 B are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, TELE2 -B- unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.51010.51111.5

MAG SILVER and TELE2 -B- Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.49-5.61-3.73-1.850.011.853.745.627.51 0.050.100.150.20
JavaScript chart by amCharts 3.21.15MQ8 NCYD
       Returns  

Pair Trading with MAG SILVER and TELE2 -B-

The main advantage of trading using opposite MAG SILVER and TELE2 -B- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, TELE2 -B- 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 TELE2 -B- will offset losses from the drop in TELE2 -B-'s long position.
The idea behind MAG SILVER and TELE2 B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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