Correlation Between First Majestic and Guaranty Trust
Can any of the company-specific risk be diversified away by investing in both First Majestic and Guaranty Trust 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 First Majestic and Guaranty Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Guaranty Trust Holding, you can compare the effects of market volatilities on First Majestic and Guaranty Trust 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 First Majestic with a short position of Guaranty Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Guaranty Trust.
Diversification Opportunities for First Majestic and Guaranty Trust
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Guaranty is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding and First Majestic 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 First Majestic Silver are associated (or correlated) with Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of First Majestic i.e., First Majestic and Guaranty Trust go up and down completely randomly.
Pair Corralation between First Majestic and Guaranty Trust
Assuming the 90 days trading horizon First Majestic Silver is expected to generate 2.81 times more return on investment than Guaranty Trust. However, First Majestic is 2.81 times more volatile than Guaranty Trust Holding. It trades about 0.13 of its potential returns per unit of risk. Guaranty Trust Holding is currently generating about 0.32 per unit of risk. If you would invest 796.00 in First Majestic Silver on October 23, 2024 and sell it today you would earn a total of 65.00 from holding First Majestic Silver or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
First Majestic Silver vs. Guaranty Trust Holding
Performance |
| Timeline |
| First Majestic Silver |
| Guaranty Trust Holding |
First Majestic and Guaranty Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Guaranty Trust
The main advantage of trading using opposite First Majestic and Guaranty Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Guaranty Trust 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 Guaranty Trust will offset losses from the drop in Guaranty Trust's long position.| First Majestic vs. Edinburgh Investment Trust | First Majestic vs. JPMorgan Japanese Investment | First Majestic vs. Clean Power Hydrogen | First Majestic vs. Jupiter Green Investment |
| Guaranty Trust vs. Blackrock World Mining | Guaranty Trust vs. Lundin Mining Corp | Guaranty Trust vs. Travel Leisure Co | Guaranty Trust vs. First Majestic Silver |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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