Correlation Between Nutrien and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Nutrien and MAG Silver 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 Nutrien and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nutrien and MAG Silver Corp, you can compare the effects of market volatilities on Nutrien and MAG Silver 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 Nutrien with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutrien and MAG Silver.
Diversification Opportunities for Nutrien and MAG Silver
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nutrien and MAG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nutrien and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp and Nutrien 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 Nutrien are associated (or correlated) with MAG Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Silver Corp has no effect on the direction of Nutrien i.e., Nutrien and MAG Silver go up and down completely randomly.
Pair Corralation between Nutrien and MAG Silver
Assuming the 90 days trading horizon Nutrien is expected to under-perform the MAG Silver. But the stock apears to be less risky and, when comparing its historical volatility, Nutrien is 1.59 times less risky than MAG Silver. The stock trades about -0.02 of its potential returns per unit of risk. The MAG Silver Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,474 in MAG Silver Corp on September 12, 2024 and sell it today you would earn a total of 747.00 from holding MAG Silver Corp or generate 50.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nutrien vs. MAG Silver Corp
Performance |
| Timeline |
| Nutrien |
| MAG Silver Corp |
Nutrien and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nutrien and MAG Silver
The main advantage of trading using opposite Nutrien and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutrien position performs unexpectedly, MAG Silver 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 MAG Silver will offset losses from the drop in MAG Silver's long position.| Nutrien vs. MAG Silver Corp | Nutrien vs. Ramp Metals | Nutrien vs. Vizsla Silver Corp | Nutrien vs. Monument Mining Limited |
| MAG Silver vs. Pan American Silver | MAG Silver vs. Endeavour Silver Corp | MAG Silver vs. SSR Mining | MAG Silver vs. Osisko Gold Ro |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |