Correlation Between First Majestic and Thunderstruck Resources
Can any of the company-specific risk be diversified away by investing in both First Majestic and Thunderstruck Resources 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 Thunderstruck Resources 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 Thunderstruck Resources, you can compare the effects of market volatilities on First Majestic and Thunderstruck Resources 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 Thunderstruck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Thunderstruck Resources.
Diversification Opportunities for First Majestic and Thunderstruck Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Thunderstruck is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Thunderstruck Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderstruck Resources 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 Thunderstruck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderstruck Resources has no effect on the direction of First Majestic i.e., First Majestic and Thunderstruck Resources go up and down completely randomly.
Pair Corralation between First Majestic and Thunderstruck Resources
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.91 times more return on investment than Thunderstruck Resources. However, First Majestic Silver is 1.1 times less risky than Thunderstruck Resources. It trades about 0.06 of its potential returns per unit of risk. Thunderstruck Resources is currently generating about -0.21 per unit of risk. If you would invest 759.00 in First Majestic Silver on November 28, 2024 and sell it today you would earn a total of 24.00 from holding First Majestic Silver or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Thunderstruck Resources
Performance |
| Timeline |
| First Majestic Silver |
| Thunderstruck Resources |
First Majestic and Thunderstruck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Thunderstruck Resources
The main advantage of trading using opposite First Majestic and Thunderstruck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Thunderstruck Resources 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 Thunderstruck Resources will offset losses from the drop in Thunderstruck Resources' long position.| First Majestic vs. Ivanhoe Energy | First Majestic vs. Flinders Resources Limited | First Majestic vs. Orezone Gold Corp | First Majestic vs. Faraday Copper Corp |
| Thunderstruck Resources vs. Asiabasemetals | Thunderstruck Resources vs. Lupaka Gold Corp | Thunderstruck Resources vs. Avrupa Minerals | Thunderstruck Resources vs. Angkor Resources 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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