Correlation Between MAG Silver and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Hemisphere Energy 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 Hemisphere Energy 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 Hemisphere Energy, you can compare the effects of market volatilities on MAG Silver and Hemisphere Energy 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 Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Hemisphere Energy.
Diversification Opportunities for MAG Silver and Hemisphere Energy
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAG and Hemisphere is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Hemisphere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy has no effect on the direction of MAG Silver i.e., MAG Silver and Hemisphere Energy go up and down completely randomly.
Pair Corralation between MAG Silver and Hemisphere Energy
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 2.47 times more return on investment than Hemisphere Energy. However, MAG Silver is 2.47 times more volatile than Hemisphere Energy. It trades about 0.17 of its potential returns per unit of risk. Hemisphere Energy is currently generating about 0.16 per unit of risk. If you would invest 1,992 in MAG Silver Corp on October 26, 2024 and sell it today you would earn a total of 166.00 from holding MAG Silver Corp or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MAG Silver Corp vs. Hemisphere Energy
Performance |
Timeline |
MAG Silver Corp |
Hemisphere Energy |
MAG Silver and Hemisphere Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAG Silver and Hemisphere Energy
The main advantage of trading using opposite MAG Silver and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Hemisphere Energy 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy'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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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