Correlation Between First Majestic and Aftermath Silver
Can any of the company-specific risk be diversified away by investing in both First Majestic and Aftermath Silver 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 Aftermath Silver 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 Aftermath Silver, you can compare the effects of market volatilities on First Majestic and Aftermath Silver 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 Aftermath Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Aftermath Silver.
Diversification Opportunities for First Majestic and Aftermath Silver
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Aftermath is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver 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 Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of First Majestic i.e., First Majestic and Aftermath Silver go up and down completely randomly.
Pair Corralation between First Majestic and Aftermath Silver
Assuming the 90 days horizon First Majestic is expected to generate 2.31 times less return on investment than Aftermath Silver. But when comparing it to its historical volatility, First Majestic Silver is 1.53 times less risky than Aftermath Silver. It trades about 0.07 of its potential returns per unit of risk. Aftermath Silver is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Aftermath Silver on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Aftermath Silver or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
First Majestic Silver vs. Aftermath Silver
Performance |
| Timeline |
| First Majestic Silver |
| Aftermath Silver |
First Majestic and Aftermath Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Aftermath Silver
The main advantage of trading using opposite First Majestic and Aftermath Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Aftermath Silver 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 Aftermath Silver will offset losses from the drop in Aftermath Silver's long position.| First Majestic vs. Talon Metals Corp | First Majestic vs. Champion Gaming Group | First Majestic vs. SalesforceCom CDR | First Majestic vs. Gfl Environmental Holdings |
| Aftermath Silver vs. Maple Peak Investments | Aftermath Silver vs. Upstart Investments | Aftermath Silver vs. CNJ Capital Investments | Aftermath Silver vs. Rocky Mountain Liquor |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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