Correlation Between First Majestic and Finlay Minerals
Can any of the company-specific risk be diversified away by investing in both First Majestic and Finlay Minerals 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 Finlay Minerals 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 Finlay Minerals, you can compare the effects of market volatilities on First Majestic and Finlay Minerals 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 Finlay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Finlay Minerals.
Diversification Opportunities for First Majestic and Finlay Minerals
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Finlay is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Finlay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finlay Minerals 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 Finlay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finlay Minerals has no effect on the direction of First Majestic i.e., First Majestic and Finlay Minerals go up and down completely randomly.
Pair Corralation between First Majestic and Finlay Minerals
Assuming the 90 days horizon First Majestic is expected to generate 11.12 times less return on investment than Finlay Minerals. But when comparing it to its historical volatility, First Majestic Silver is 9.04 times less risky than Finlay Minerals. It trades about 0.13 of its potential returns per unit of risk. Finlay Minerals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Finlay Minerals on October 21, 2024 and sell it today you would earn a total of 1.50 from holding Finlay Minerals or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Finlay Minerals
Performance |
| Timeline |
| First Majestic Silver |
| Finlay Minerals |
First Majestic and Finlay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Finlay Minerals
The main advantage of trading using opposite First Majestic and Finlay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Finlay Minerals 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 Finlay Minerals will offset losses from the drop in Finlay Minerals' long position.| First Majestic vs. Computer Modelling Group | First Majestic vs. Calibre Mining Corp | First Majestic vs. Mako Mining Corp | First Majestic vs. Cogeco Communications |
| Finlay Minerals vs. First Majestic Silver | Finlay Minerals vs. Ivanhoe Energy | Finlay Minerals vs. Flinders Resources Limited | Finlay Minerals vs. Orezone Gold 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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