Correlation Between Americas Gold and MAG Silver
Can any of the company-specific risk be diversified away by investing in both Americas Gold 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 Americas Gold and MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americas Gold and and MAG Silver Corp, you can compare the effects of market volatilities on Americas Gold 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 Americas Gold with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Gold and MAG Silver.
Diversification Opportunities for Americas Gold and MAG Silver
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Americas and MAG is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Americas Gold and 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 Americas Gold 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 Americas Gold and 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 Americas Gold i.e., Americas Gold and MAG Silver go up and down completely randomly.
Pair Corralation between Americas Gold and MAG Silver
Assuming the 90 days trading horizon Americas Gold and is expected to generate 1.95 times more return on investment than MAG Silver. However, Americas Gold is 1.95 times more volatile than MAG Silver Corp. It trades about 0.22 of its potential returns per unit of risk. MAG Silver Corp is currently generating about 0.26 per unit of risk. If you would invest 39.00 in Americas Gold and on November 7, 2024 and sell it today you would earn a total of 9.00 from holding Americas Gold and or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Americas Gold and vs. MAG Silver Corp
Performance |
| Timeline |
| Americas Gold |
| MAG Silver Corp |
Americas Gold and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americas Gold and MAG Silver
The main advantage of trading using opposite Americas Gold and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Gold 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.| Americas Gold vs. Pan American Silver | Americas Gold vs. First Majestic Silver | Americas Gold vs. MAG Silver Corp | Americas Gold vs. Silvercorp Metals |
| MAG Silver vs. Pan American Silver | MAG Silver vs. First Majestic Silver | MAG Silver vs. Silvercorp Metals | MAG Silver vs. Endeavour Silver 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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