Correlation Between First Majestic and Bluestone Resources
Can any of the company-specific risk be diversified away by investing in both First Majestic and Bluestone 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 Bluestone 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 Bluestone Resources, you can compare the effects of market volatilities on First Majestic and Bluestone 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 Bluestone Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Bluestone Resources.
Diversification Opportunities for First Majestic and Bluestone Resources
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Bluestone is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Bluestone Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluestone 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 Bluestone Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluestone Resources has no effect on the direction of First Majestic i.e., First Majestic and Bluestone Resources go up and down completely randomly.
Pair Corralation between First Majestic and Bluestone Resources
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Bluestone Resources. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 2.54 times less risky than Bluestone Resources. The stock trades about 0.0 of its potential returns per unit of risk. The Bluestone Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Bluestone Resources on August 26, 2024 and sell it today you would lose (30.00) from holding Bluestone Resources or give up 49.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Bluestone Resources
Performance |
| Timeline |
| First Majestic Silver |
| Bluestone Resources |
First Majestic and Bluestone Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Bluestone Resources
The main advantage of trading using opposite First Majestic and Bluestone Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Bluestone 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 Bluestone Resources will offset losses from the drop in Bluestone Resources' long position.| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
| Bluestone Resources vs. First Majestic Silver | Bluestone Resources vs. Ivanhoe Energy | Bluestone Resources vs. Orezone Gold Corp | Bluestone Resources 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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