Correlation Between First Majestic and AbraSilver Resource
Can any of the company-specific risk be diversified away by investing in both First Majestic and AbraSilver Resource 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 AbraSilver Resource 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 AbraSilver Resource Corp, you can compare the effects of market volatilities on First Majestic and AbraSilver Resource 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 AbraSilver Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and AbraSilver Resource.
Diversification Opportunities for First Majestic and AbraSilver Resource
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and AbraSilver is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp 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 AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of First Majestic i.e., First Majestic and AbraSilver Resource go up and down completely randomly.
Pair Corralation between First Majestic and AbraSilver Resource
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.76 times more return on investment than AbraSilver Resource. However, First Majestic Silver is 1.31 times less risky than AbraSilver Resource. It trades about -0.3 of its potential returns per unit of risk. AbraSilver Resource Corp is currently generating about -0.27 per unit of risk. If you would invest 1,062 in First Majestic Silver on August 29, 2024 and sell it today you would lose (197.00) from holding First Majestic Silver or give up 18.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. AbraSilver Resource Corp
Performance |
| Timeline |
| First Majestic Silver |
| AbraSilver Resource Corp |
First Majestic and AbraSilver Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and AbraSilver Resource
The main advantage of trading using opposite First Majestic and AbraSilver Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, AbraSilver Resource 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 AbraSilver Resource will offset losses from the drop in AbraSilver Resource'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 |
| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. Santacruz Silv | AbraSilver Resource vs. Guanajuato Silver | AbraSilver Resource vs. Aftermath 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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