Correlation Between MAG Silver and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both MAG Silver and NeXGold Mining 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 NeXGold Mining 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 NeXGold Mining Corp, you can compare the effects of market volatilities on MAG Silver and NeXGold Mining 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and NeXGold Mining.
Diversification Opportunities for MAG Silver and NeXGold Mining
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MAG and NeXGold is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of MAG Silver i.e., MAG Silver and NeXGold Mining go up and down completely randomly.
Pair Corralation between MAG Silver and NeXGold Mining
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 0.88 times more return on investment than NeXGold Mining. However, MAG Silver Corp is 1.13 times less risky than NeXGold Mining. It trades about 0.09 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about 0.0 per unit of risk. If you would invest 1,643 in MAG Silver Corp on December 4, 2024 and sell it today you would earn a total of 499.00 from holding MAG Silver Corp or generate 30.37% 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. NeXGold Mining Corp
Performance |
Timeline |
MAG Silver Corp |
NeXGold Mining Corp |
MAG Silver and NeXGold Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAG Silver and NeXGold Mining
The main advantage of trading using opposite MAG Silver and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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