Correlation Between Primaris Retail and MAG Silver

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

By analyzing existing cross correlation between Primaris Retail RE and MAG Silver Corp, you can compare the effects of market volatilities on Primaris Retail 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 Primaris Retail with a short position of MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and MAG Silver.

Diversification Opportunities for Primaris Retail and MAG Silver

0.27

Correlation Coefficient

Primaris Retail  MAG Silver

Modest diversification

The 3 months correlation between Primaris and MAG is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp and Primaris Retail 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 Primaris Retail RE 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 Corp has no effect on the direction of Primaris Retail i.e., Primaris Retail and MAG Silver go up and down completely randomly.

Pair Corralation between Primaris Retail and MAG Silver

Assuming the 90 days trading horizon Primaris Retail is expected to generate 4.98 times less return on investment than MAG Silver. But when comparing it to its historical volatility, Primaris Retail RE is 2.0 times less risky than MAG Silver. It trades about 0.01 of its potential returns per unit of risk. MAG Silver Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,865  in MAG Silver Corp on October 24, 2024 and sell it today you would earn a total of  299.00  from holding MAG Silver Corp or generate 16.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Primaris Retail RE  vs.  MAG Silver Corp

Primaris Retail RE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with Primaris Retail and MAG Silver

The main advantage of trading using opposite Primaris Retail and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail 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 Primaris Retail RE and MAG 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.