Correlation Between First Majestic and Elcora Advanced
Can any of the company-specific risk be diversified away by investing in both First Majestic and Elcora Advanced 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 Elcora Advanced 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 Elcora Advanced Materials, you can compare the effects of market volatilities on First Majestic and Elcora Advanced 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 Elcora Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Elcora Advanced.
Diversification Opportunities for First Majestic and Elcora Advanced
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Elcora is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Elcora Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcora Advanced Materials 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 Elcora Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcora Advanced Materials has no effect on the direction of First Majestic i.e., First Majestic and Elcora Advanced go up and down completely randomly.
Pair Corralation between First Majestic and Elcora Advanced
Assuming the 90 days horizon First Majestic is expected to generate 225.27 times less return on investment than Elcora Advanced. But when comparing it to its historical volatility, First Majestic Silver is 12.7 times less risky than Elcora Advanced. It trades about 0.0 of its potential returns per unit of risk. Elcora Advanced Materials is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 120.00 in Elcora Advanced Materials on November 27, 2024 and sell it today you would lose (106.00) from holding Elcora Advanced Materials or give up 88.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Elcora Advanced Materials
Performance |
| Timeline |
| First Majestic Silver |
| Elcora Advanced Materials |
First Majestic and Elcora Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Elcora Advanced
The main advantage of trading using opposite First Majestic and Elcora Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Elcora Advanced 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 Elcora Advanced will offset losses from the drop in Elcora Advanced's 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 |
| Elcora Advanced vs. Black Widow Resources | Elcora Advanced vs. Magnum Goldcorp | Elcora Advanced vs. Leading Edge Materials | Elcora Advanced vs. Eros 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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