Correlation Between MAG SILVER and MINCO SILVER

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

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

Diversification Opportunities for MAG SILVER and MINCO SILVER

0.18

Correlation Coefficient

MAG SILVER  MINCO SILVER

Average diversification

The 3 months correlation between MAG and MINCO is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 are associated (or correlated) with MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of MAG SILVER i.e., MAG SILVER and MINCO SILVER go up and down completely randomly.

Pair Corralation between MAG SILVER and MINCO SILVER

Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.16 times less return on investment than MINCO SILVER. But when comparing it to its historical volatility, MAG SILVER is 1.95 times less risky than MINCO SILVER. It trades about 0.18 of its potential returns per unit of risk. MINCO SILVER is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  12.00  in MINCO SILVER on October 26, 2024 and sell it today you would earn a total of  1.00  from holding MINCO SILVER or generate 8.33% return on investment over 90 days.

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

MAG SILVER  vs.  MINCO SILVER

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.

MINCO SILVER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MINCO SILVER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, MINCO SILVER is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MAG SILVER and MINCO SILVER

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

The idea behind MAG SILVER and MINCO 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.