Correlation Between First Majestic and Sage Group
Can any of the company-specific risk be diversified away by investing in both First Majestic and Sage Group 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 Sage Group 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 Sage Group PLC, you can compare the effects of market volatilities on First Majestic and Sage Group 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 Sage Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Sage Group.
Diversification Opportunities for First Majestic and Sage Group
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Sage is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Sage Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Group PLC 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 Sage Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Group PLC has no effect on the direction of First Majestic i.e., First Majestic and Sage Group go up and down completely randomly.
Pair Corralation between First Majestic and Sage Group
Assuming the 90 days trading horizon First Majestic is expected to generate 13.83 times less return on investment than Sage Group. In addition to that, First Majestic is 2.23 times more volatile than Sage Group PLC. It trades about 0.0 of its total potential returns per unit of risk. Sage Group PLC is currently generating about 0.09 per unit of volatility. If you would invest 74,849 in Sage Group PLC on October 29, 2024 and sell it today you would earn a total of 58,151 from holding Sage Group PLC or generate 77.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
First Majestic Silver vs. Sage Group PLC
Performance |
| Timeline |
| First Majestic Silver |
| Sage Group PLC |
First Majestic and Sage Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Sage Group
The main advantage of trading using opposite First Majestic and Sage Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Sage Group 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 Sage Group will offset losses from the drop in Sage Group's long position.| First Majestic vs. Berkshire Hathaway | First Majestic vs. Samsung Electronics Co | First Majestic vs. Samsung Electronics Co | First Majestic vs. Chocoladefabriken Lindt Spruengli |
| Sage Group vs. Cardinal Health | Sage Group vs. PureTech Health plc | Sage Group vs. Applied Materials | Sage Group vs. Spire Healthcare Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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