Correlation Between First Majestic and Fortune Bay
Can any of the company-specific risk be diversified away by investing in both First Majestic and Fortune Bay 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 Fortune Bay 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 Fortune Bay Corp, you can compare the effects of market volatilities on First Majestic and Fortune Bay 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 Fortune Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Fortune Bay.
Diversification Opportunities for First Majestic and Fortune Bay
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Fortune is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Fortune Bay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Bay Corp 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 Fortune Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Bay Corp has no effect on the direction of First Majestic i.e., First Majestic and Fortune Bay go up and down completely randomly.
Pair Corralation between First Majestic and Fortune Bay
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Fortune Bay. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.48 times less risky than Fortune Bay. The stock trades about -0.01 of its potential returns per unit of risk. The Fortune Bay Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Fortune Bay Corp on September 1, 2024 and sell it today you would lose (1.00) from holding Fortune Bay Corp or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
First Majestic Silver vs. Fortune Bay Corp
Performance |
| Timeline |
| First Majestic Silver |
| Fortune Bay Corp |
First Majestic and Fortune Bay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Fortune Bay
The main advantage of trading using opposite First Majestic and Fortune Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Fortune Bay 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 Fortune Bay will offset losses from the drop in Fortune Bay's long position.| First Majestic vs. Slate Grocery REIT | First Majestic vs. Toronto Dominion Bank | First Majestic vs. Enduro Metals Corp | First Majestic vs. Intact Financial Corp |
| Fortune Bay vs. Eros Resources Corp | Fortune Bay vs. Lupaka Gold Corp | Fortune Bay vs. Black Widow Resources | Fortune Bay vs. Magnum Goldcorp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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