Correlation Between First Majestic and Chemtrade Logistics
Can any of the company-specific risk be diversified away by investing in both First Majestic and Chemtrade Logistics 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 Chemtrade Logistics 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 Chemtrade Logistics Income, you can compare the effects of market volatilities on First Majestic and Chemtrade Logistics 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 Chemtrade Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Chemtrade Logistics.
Diversification Opportunities for First Majestic and Chemtrade Logistics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Chemtrade is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics 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 Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of First Majestic i.e., First Majestic and Chemtrade Logistics go up and down completely randomly.
Pair Corralation between First Majestic and Chemtrade Logistics
Assuming the 90 days horizon First Majestic Silver is expected to generate 3.69 times more return on investment than Chemtrade Logistics. However, First Majestic is 3.69 times more volatile than Chemtrade Logistics Income. It trades about 0.07 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about 0.24 per unit of risk. If you would invest 746.00 in First Majestic Silver on August 28, 2024 and sell it today you would earn a total of 104.00 from holding First Majestic Silver or generate 13.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Chemtrade Logistics Income
Performance |
| Timeline |
| First Majestic Silver |
| Chemtrade Logistics |
First Majestic and Chemtrade Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Chemtrade Logistics
The main advantage of trading using opposite First Majestic and Chemtrade Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Chemtrade Logistics 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 Chemtrade Logistics will offset losses from the drop in Chemtrade Logistics' long position.| First Majestic vs. Quisitive Technology Solutions | First Majestic vs. Canso Select Opportunities | First Majestic vs. Canadian General Investments | First Majestic vs. Sparx Technology |
| Chemtrade Logistics vs. First Hydrogen Corp | Chemtrade Logistics vs. Next Hydrogen Solutions | Chemtrade Logistics vs. iShares Canadian HYBrid | Chemtrade Logistics vs. Altagas Cum Red |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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