Correlation Between MAG Silver and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Canadian Imperial 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 Canadian Imperial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and Canadian Imperial Bank, you can compare the effects of market volatilities on MAG Silver and Canadian Imperial 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 Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Canadian Imperial.
Diversification Opportunities for MAG Silver and Canadian Imperial
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MAG and Canadian is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Canadian Imperial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Imperial Bank 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 Corp are associated (or correlated) with Canadian Imperial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Imperial Bank has no effect on the direction of MAG Silver i.e., MAG Silver and Canadian Imperial go up and down completely randomly.
Pair Corralation between MAG Silver and Canadian Imperial
Assuming the 90 days trading horizon MAG Silver is expected to generate 4.36 times less return on investment than Canadian Imperial. In addition to that, MAG Silver is 3.7 times more volatile than Canadian Imperial Bank. It trades about 0.01 of its total potential returns per unit of risk. Canadian Imperial Bank is currently generating about 0.09 per unit of volatility. If you would invest 1,914 in Canadian Imperial Bank on September 26, 2024 and sell it today you would earn a total of 636.00 from holding Canadian Imperial Bank or generate 33.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MAG Silver Corp vs. Canadian Imperial Bank
Performance |
Timeline |
MAG Silver Corp |
Canadian Imperial Bank |
MAG Silver and Canadian Imperial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAG Silver and Canadian Imperial
The main advantage of trading using opposite MAG Silver and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Canadian Imperial 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 Canadian Imperial will offset losses from the drop in Canadian Imperial's long position.MAG Silver vs. Pan American Silver | MAG Silver vs. Endeavour Silver Corp | MAG Silver vs. SSR Mining | MAG Silver vs. Osisko Gold Ro |
Canadian Imperial vs. MAG Silver Corp | Canadian Imperial vs. NeXGold Mining Corp | Canadian Imperial vs. Forsys Metals Corp | Canadian Imperial vs. Highwood Asset Management |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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