Correlation Between First Majestic and Avrupa Minerals
Can any of the company-specific risk be diversified away by investing in both First Majestic and Avrupa Minerals 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 Avrupa Minerals 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 Avrupa Minerals, you can compare the effects of market volatilities on First Majestic and Avrupa Minerals 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 Avrupa Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Avrupa Minerals.
Diversification Opportunities for First Majestic and Avrupa Minerals
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Avrupa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Avrupa Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avrupa Minerals 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 Avrupa Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avrupa Minerals has no effect on the direction of First Majestic i.e., First Majestic and Avrupa Minerals go up and down completely randomly.
Pair Corralation between First Majestic and Avrupa Minerals
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Avrupa Minerals. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 2.72 times less risky than Avrupa Minerals. The stock trades about -0.3 of its potential returns per unit of risk. The Avrupa Minerals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Avrupa Minerals on August 29, 2024 and sell it today you would earn a total of 0.50 from holding Avrupa Minerals or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Majestic Silver vs. Avrupa Minerals
Performance |
| Timeline |
| First Majestic Silver |
| Avrupa Minerals |
First Majestic and Avrupa Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Avrupa Minerals
The main advantage of trading using opposite First Majestic and Avrupa Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Avrupa Minerals 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 Avrupa Minerals will offset losses from the drop in Avrupa Minerals' 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 |
| Avrupa Minerals vs. First Majestic Silver | Avrupa Minerals vs. Ivanhoe Energy | Avrupa Minerals vs. Orezone Gold Corp | Avrupa Minerals 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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