Correlation Between MAG Silver and Great Panther

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

Diversification Opportunities for MAG Silver and Great Panther

0.0

Correlation Coefficient

MAG Silver  Great Panther

Pay attention - limited upside

The 3 months correlation between MAG and Great is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Great Panther Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Panther Mining 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 Great Panther. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Panther Mining has no effect on the direction of MAG Silver i.e., MAG Silver and Great Panther go up and down completely randomly.

Pair Corralation between MAG Silver and Great Panther

If you would invest  1,222  in MAG Silver Corp on February 3, 2024 and sell it today you would earn a total of  6.00  from holding MAG Silver Corp or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MAG Silver Corp  vs.  Great Panther Mining

MAG Silver Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAG Silver Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MAG Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Great Panther Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great Panther Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Great Panther is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MAG Silver and Great Panther

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

The idea behind MAG Silver Corp and Great Panther Mining 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 Commodity Directory module to find actively traded commodities issued by global exchanges.