Correlation Between MAG Silver and Exchange Income
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Exchange Income 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 Exchange Income 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 Exchange Income, you can compare the effects of market volatilities on MAG Silver and Exchange Income 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 Exchange Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Exchange Income.
Diversification Opportunities for MAG Silver and Exchange Income
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MAG and Exchange is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Exchange Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Income 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 Exchange Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Income has no effect on the direction of MAG Silver i.e., MAG Silver and Exchange Income go up and down completely randomly.
Pair Corralation between MAG Silver and Exchange Income
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 2.16 times more return on investment than Exchange Income. However, MAG Silver is 2.16 times more volatile than Exchange Income. It trades about 0.23 of its potential returns per unit of risk. Exchange Income is currently generating about 0.48 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. Exchange Income
Performance |
Timeline |
MAG Silver Corp |
Exchange Income |
MAG Silver and Exchange Income Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MAG Silver and Exchange Income
The main advantage of trading using opposite MAG Silver and Exchange Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Exchange Income 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 Exchange Income will offset losses from the drop in Exchange Income's long position.MAG Silver vs. Gold Springs Resource | MAG Silver vs. Kesselrun Resources | MAG Silver vs. Kermode Resources | MAG Silver vs. Kore Mining |
Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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