Correlation Between Wilh Wilhelmsen and MAG SILVER

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

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

Diversification Opportunities for Wilh Wilhelmsen and MAG SILVER

-0.66

Correlation Coefficient

Wilh Wilhelmsen  MAG SILVER

Excellent diversification

The 3 months correlation between Wilh and MAG is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wilh Wilhelmsen Holding and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER and Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding 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 Wilh Wilhelmsen i.e., Wilh Wilhelmsen and MAG SILVER go up and down completely randomly.

Pair Corralation between Wilh Wilhelmsen and MAG SILVER

Assuming the 90 days trading horizon Wilh Wilhelmsen Holding is expected to under-perform the MAG SILVER. But the stock apears to be less risky and, when comparing its historical volatility, Wilh Wilhelmsen Holding is 1.61 times less risky than MAG SILVER. The stock trades about -0.03 of its potential returns per unit of risk. The MAG SILVER is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,336  in MAG SILVER on October 24, 2024 and sell it today you would earn a total of  141.00  from holding MAG SILVER or generate 10.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Wilh Wilhelmsen Holding  vs.  MAG SILVER

Wilh Wilhelmsen Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wilh Wilhelmsen Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Wilh Wilhelmsen reported solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady 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 Wilh Wilhelmsen and MAG SILVER

The main advantage of trading using opposite Wilh Wilhelmsen and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.