Correlation Between Lundin Mining and First Majestic
Can any of the company-specific risk be diversified away by investing in both Lundin Mining and First Majestic 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 Lundin Mining and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Mining Corp and First Majestic Silver, you can compare the effects of market volatilities on Lundin Mining and First Majestic 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 Lundin Mining with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Mining and First Majestic.
Diversification Opportunities for Lundin Mining and First Majestic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lundin and First is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Mining Corp and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and Lundin Mining 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 Lundin Mining Corp are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Lundin Mining i.e., Lundin Mining and First Majestic go up and down completely randomly.
Pair Corralation between Lundin Mining and First Majestic
Assuming the 90 days trading horizon Lundin Mining Corp is expected to under-perform the First Majestic. But the stock apears to be less risky and, when comparing its historical volatility, Lundin Mining Corp is 1.4 times less risky than First Majestic. The stock trades about -0.06 of its potential returns per unit of risk. The First Majestic Silver is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 776.00 in First Majestic Silver on November 27, 2024 and sell it today you would earn a total of 8.00 from holding First Majestic Silver or generate 1.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lundin Mining Corp vs. First Majestic Silver
Performance |
Timeline |
Lundin Mining Corp |
First Majestic Silver |
Lundin Mining and First Majestic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lundin Mining and First Majestic
The main advantage of trading using opposite Lundin Mining and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Mining position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.Lundin Mining vs. Resolute Mining Limited | ||
Lundin Mining vs. First Class Metals | ||
Lundin Mining vs. GreenX Metals | ||
Lundin Mining vs. Eastinco Mining Exploration |
First Majestic vs. Ecofin Global Utilities | ||
First Majestic vs. Spirent Communications plc | ||
First Majestic vs. Trainline Plc | ||
First Majestic vs. Roadside Real Estate |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |