Correlation Between First Majestic and CANEX Metals
Can any of the company-specific risk be diversified away by investing in both First Majestic and CANEX Metals 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 CANEX Metals 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 CANEX Metals, you can compare the effects of market volatilities on First Majestic and CANEX Metals 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 CANEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and CANEX Metals.
Diversification Opportunities for First Majestic and CANEX Metals
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and CANEX is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and CANEX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CANEX Metals 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 CANEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CANEX Metals has no effect on the direction of First Majestic i.e., First Majestic and CANEX Metals go up and down completely randomly.
Pair Corralation between First Majestic and CANEX Metals
Assuming the 90 days horizon First Majestic is expected to generate 10.67 times less return on investment than CANEX Metals. But when comparing it to its historical volatility, First Majestic Silver is 3.04 times less risky than CANEX Metals. It trades about 0.01 of its potential returns per unit of risk. CANEX Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7.00 in CANEX Metals on August 26, 2024 and sell it today you would lose (2.00) from holding CANEX Metals or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. CANEX Metals
Performance |
| Timeline |
| First Majestic Silver |
| CANEX Metals |
First Majestic and CANEX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and CANEX Metals
The main advantage of trading using opposite First Majestic and CANEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, CANEX Metals 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 CANEX Metals will offset losses from the drop in CANEX Metals' long position.| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
| CANEX Metals vs. First Majestic Silver | CANEX Metals vs. Ivanhoe Energy | CANEX Metals vs. Orezone Gold Corp | CANEX Metals 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |