Correlation Between MAG SILVER and Nike
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and Nike 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 Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Nike Inc, you can compare the effects of market volatilities on MAG SILVER and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Nike.
Diversification Opportunities for MAG SILVER and Nike
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAG and Nike is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of MAG SILVER i.e., MAG SILVER and Nike go up and down completely randomly.
Pair Corralation between MAG SILVER and Nike
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.68 times more return on investment than Nike. However, MAG SILVER is 1.68 times more volatile than Nike Inc. It trades about 0.01 of its potential returns per unit of risk. Nike Inc is currently generating about -0.06 per unit of risk. If you would invest 1,401 in MAG SILVER on October 14, 2024 and sell it today you would lose (3.00) from holding MAG SILVER or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. Nike Inc
Performance |
| Timeline |
| MAG SILVER |
| Nike Inc |
MAG SILVER and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Nike
The main advantage of trading using opposite MAG SILVER and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike's long position.| MAG SILVER vs. SANOK RUBBER ZY | MAG SILVER vs. VULCAN MATERIALS | MAG SILVER vs. HK Electric Investments | MAG SILVER vs. Summit Materials |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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