Correlation Between Alaska Energy and First Majestic
Can any of the company-specific risk be diversified away by investing in both Alaska Energy 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 Alaska Energy and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and First Majestic Silver, you can compare the effects of market volatilities on Alaska Energy 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 Alaska Energy with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and First Majestic.
Diversification Opportunities for Alaska Energy and First Majestic
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alaska and First is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals 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 Alaska Energy 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 Alaska Energy Metals 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 Alaska Energy i.e., Alaska Energy and First Majestic go up and down completely randomly.
Pair Corralation between Alaska Energy and First Majestic
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the First Majestic. In addition to that, Alaska Energy is 1.35 times more volatile than First Majestic Silver. It trades about -0.25 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.1 per unit of volatility. If you would invest 759.00 in First Majestic Silver on November 27, 2024 and sell it today you would earn a total of 48.00 from holding First Majestic Silver or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. First Majestic Silver
Performance |
| Timeline |
| Alaska Energy Metals |
| First Majestic Silver |
Alaska Energy and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and First Majestic
The main advantage of trading using opposite Alaska Energy and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy 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.| Alaska Energy vs. Metalero Mining Corp | Alaska Energy vs. Magna Mining | Alaska Energy vs. Summa Silver Corp | Alaska Energy vs. Vizsla Silver Corp |
| First Majestic vs. Ivanhoe Energy | First Majestic vs. Flinders Resources Limited | First Majestic vs. Orezone Gold Corp | First Majestic vs. Faraday Copper Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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