Correlation Between First Majestic and GMV Minerals
Can any of the company-specific risk be diversified away by investing in both First Majestic and GMV 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 GMV 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 GMV Minerals, you can compare the effects of market volatilities on First Majestic and GMV 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 GMV Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and GMV Minerals.
Diversification Opportunities for First Majestic and GMV Minerals
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and GMV is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and GMV Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMV 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 GMV Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMV Minerals has no effect on the direction of First Majestic i.e., First Majestic and GMV Minerals go up and down completely randomly.
Pair Corralation between First Majestic and GMV Minerals
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.38 times more return on investment than GMV Minerals. However, First Majestic Silver is 2.62 times less risky than GMV Minerals. It trades about -0.25 of its potential returns per unit of risk. GMV Minerals is currently generating about -0.14 per unit of risk. If you would invest 1,002 in First Majestic Silver on September 2, 2024 and sell it today you would lose (134.00) from holding First Majestic Silver or give up 13.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. GMV Minerals
Performance |
| Timeline |
| First Majestic Silver |
| GMV Minerals |
First Majestic and GMV Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and GMV Minerals
The main advantage of trading using opposite First Majestic and GMV Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, GMV 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 GMV Minerals will offset losses from the drop in GMV Minerals' long position.| First Majestic vs. Converge Technology Solutions | First Majestic vs. Firan Technology Group | First Majestic vs. Broadcom | First Majestic vs. Perseus Mining |
| GMV Minerals vs. Altamira Gold Corp | GMV Minerals vs. Tarku Resources | GMV Minerals vs. Finlay Minerals | GMV Minerals vs. Adamera Minerals 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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