Correlation Between Silvercorp Metals and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Silvercorp Metals 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 Silvercorp Metals and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silvercorp Metals and MAG Silver Corp, you can compare the effects of market volatilities on Silvercorp Metals 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 Silvercorp Metals with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and MAG Silver.
Diversification Opportunities for Silvercorp Metals and MAG Silver
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Silvercorp and MAG is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp Metals 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 Silvercorp Metals 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 Silvercorp Metals 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 Silvercorp Metals i.e., Silvercorp Metals and MAG Silver go up and down completely randomly.
Pair Corralation between Silvercorp Metals and MAG Silver
Assuming the 90 days trading horizon Silvercorp Metals is expected to under-perform the MAG Silver. In addition to that, Silvercorp Metals is 1.75 times more volatile than MAG Silver Corp. It trades about -0.4 of its total potential returns per unit of risk. MAG Silver Corp is currently generating about -0.24 per unit of volatility. If you would invest 2,473 in MAG Silver Corp on August 29, 2024 and sell it today you would lose (311.00) from holding MAG Silver Corp or give up 12.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Silvercorp Metals vs. MAG Silver Corp
Performance |
| Timeline |
| Silvercorp Metals |
| MAG Silver Corp |
Silvercorp Metals and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and MAG Silver
The main advantage of trading using opposite Silvercorp Metals and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp Metals 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.| Silvercorp Metals vs. Endeavour Silver Corp | Silvercorp Metals vs. Fortuna Silver Mines | Silvercorp Metals vs. MAG Silver Corp | Silvercorp Metals vs. Pan American Silver |
| MAG Silver vs. First Majestic Silver | MAG Silver vs. Ivanhoe Energy | MAG Silver vs. Orezone Gold Corp | MAG Silver vs. Faraday Copper Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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