Correlation Between Mitsui Mining and MAG SILVER

Can any of the company-specific risk be diversified away by investing in both Mitsui Mining and MAG 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 Mitsui Mining and MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mitsui Mining Smelting and MAG SILVER, you can compare the effects of market volatilities on Mitsui Mining and MAG 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 Mitsui Mining with a short position of MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Mining and MAG SILVER.

Diversification Opportunities for Mitsui Mining and MAG SILVER

0.48

Correlation Coefficient

Mitsui Mining  MAG SILVER

Very weak diversification

The 3 months correlation between Mitsui and MAG is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Mining Smelting and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER and Mitsui Mining 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 Mitsui Mining Smelting are associated (or correlated) with MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of Mitsui Mining i.e., Mitsui Mining and MAG SILVER go up and down completely randomly.

Pair Corralation between Mitsui Mining and MAG SILVER

Assuming the 90 days horizon Mitsui Mining Smelting is expected to generate 0.8 times more return on investment than MAG SILVER. However, Mitsui Mining Smelting is 1.25 times less risky than MAG SILVER. It trades about 0.03 of its potential returns per unit of risk. MAG SILVER is currently generating about 0.02 per unit of risk. If you would invest  2,300  in Mitsui Mining Smelting on October 27, 2024 and sell it today you would earn a total of  600.00  from holding Mitsui Mining Smelting or generate 26.09% return on investment over 90 days.

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

Mitsui Mining Smelting  vs.  MAG SILVER

Mitsui Mining Smelting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mitsui Mining Smelting has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Mitsui Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MAG SILVER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAG SILVER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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 Mitsui Mining and MAG SILVER

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

The idea behind Mitsui Mining Smelting and MAG SILVER 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.