Correlation Between MAG Silver and Dollarama

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

Diversification Opportunities for MAG Silver and Dollarama

0.83

Correlation Coefficient

MAG Silver  Dollarama

Very poor diversification

The 3 months correlation between MAG and Dollarama is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama 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 Dollarama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollarama has no effect on the direction of MAG Silver i.e., MAG Silver and Dollarama go up and down completely randomly.

Pair Corralation between MAG Silver and Dollarama

Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 1.4 times more return on investment than Dollarama. However, MAG Silver is 1.4 times more volatile than Dollarama. It trades about 0.23 of its potential returns per unit of risk. Dollarama is currently generating about 0.12 per unit of risk. If you would invest  2,125  in MAG Silver Corp on April 20, 2025 and sell it today you would earn a total of  749.00  from holding MAG Silver Corp or generate 35.25% return on investment over 90 days.

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

MAG Silver Corp  vs.  Dollarama

MAG Silver Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MAG Silver Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, MAG Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Dollarama

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dollarama are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Dollarama may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with MAG Silver and Dollarama

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

The idea behind MAG Silver Corp and Dollarama 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.