Correlation Between MAG Silver and Vizsla Silver

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

Diversification Opportunities for MAG Silver and Vizsla Silver

0.65

Correlation Coefficient

MAG Silver  Vizsla Silver

Poor diversification

The 3 months correlation between MAG and Vizsla is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Vizsla Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vizsla Silver 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 Vizsla Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vizsla Silver Corp has no effect on the direction of MAG Silver i.e., MAG Silver and Vizsla Silver go up and down completely randomly.

Pair Corralation between MAG Silver and Vizsla Silver

Assuming the 90 days trading horizon MAG Silver is expected to generate 2.2 times less return on investment than Vizsla Silver. But when comparing it to its historical volatility, MAG Silver Corp is 1.41 times less risky than Vizsla Silver. It trades about 0.16 of its potential returns per unit of risk. Vizsla Silver Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  253.00  in Vizsla Silver Corp on October 25, 2024 and sell it today you would earn a total of  46.00  from holding Vizsla Silver Corp or generate 18.18% return on investment over 90 days.

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

MAG Silver Corp  vs.  Vizsla Silver Corp

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 latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Vizsla Silver Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vizsla Silver Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Vizsla Silver is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MAG Silver and Vizsla Silver

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

The idea behind MAG Silver Corp and Vizsla Silver Corp 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.