Correlation Between MAG Silver and Slate Grocery

Can any of the company-specific risk be diversified away by investing in both MAG Silver and Slate Grocery 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 Slate Grocery 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 Slate Grocery REIT, you can compare the effects of market volatilities on MAG Silver and Slate Grocery 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 Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Slate Grocery.

Diversification Opportunities for MAG Silver and Slate Grocery

0.13

Correlation Coefficient

MAG Silver  Slate Grocery

Average diversification

The 3 months correlation between MAG and Slate is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of MAG Silver i.e., MAG Silver and Slate Grocery go up and down completely randomly.

Pair Corralation between MAG Silver and Slate Grocery

Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 2.02 times more return on investment than Slate Grocery. However, MAG Silver is 2.02 times more volatile than Slate Grocery REIT. It trades about -0.14 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about -0.38 per unit of risk. If you would invest  2,250  in MAG Silver Corp on October 12, 2024 and sell it today you would lose (165.00) from holding MAG Silver Corp or give up 7.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

MAG Silver Corp  vs.  Slate Grocery REIT

MAG Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAG Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, MAG Silver is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Slate Grocery REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Slate Grocery REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with MAG Silver and Slate Grocery

The main advantage of trading using opposite MAG Silver and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.

The idea behind MAG Silver Corp and Slate Grocery REIT 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.