Correlation Between Blackline and MAG SILVER

Can any of the company-specific risk be diversified away by investing in both Blackline 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 Blackline and MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackline and MAG SILVER, you can compare the effects of market volatilities on Blackline 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 Blackline with a short position of MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and MAG SILVER.

Diversification Opportunities for Blackline and MAG SILVER

-0.08

Correlation Coefficient

Blackline  MAG SILVER

Good diversification

The 3 months correlation between Blackline and MAG is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER and Blackline 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 Blackline 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 has no effect on the direction of Blackline i.e., Blackline and MAG SILVER go up and down completely randomly.

Pair Corralation between Blackline and MAG SILVER

Assuming the 90 days horizon Blackline is expected to under-perform the MAG SILVER. In addition to that, Blackline is 1.11 times more volatile than MAG SILVER. It trades about -0.13 of its total potential returns per unit of risk. MAG SILVER is currently generating about 0.07 per unit of volatility. If you would invest  1,336  in MAG SILVER on December 21, 2024 and sell it today you would earn a total of  130.00  from holding MAG SILVER or generate 9.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackline  vs.  MAG SILVER

Blackline

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackline has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MAG SILVER

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAG SILVER are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, MAG SILVER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackline and MAG SILVER

The main advantage of trading using opposite Blackline and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackline 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.

The idea behind Blackline and MAG SILVER 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 Transaction History module to view history of all your transactions and understand their impact on performance.