Correlation Between First Majestic and Globex Mining
Can any of the company-specific risk be diversified away by investing in both First Majestic and Globex Mining 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 Globex Mining 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 Globex Mining Enterprises, you can compare the effects of market volatilities on First Majestic and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Globex Mining.
Diversification Opportunities for First Majestic and Globex Mining
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Globex is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of First Majestic i.e., First Majestic and Globex Mining go up and down completely randomly.
Pair Corralation between First Majestic and Globex Mining
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Globex Mining. In addition to that, First Majestic is 1.19 times more volatile than Globex Mining Enterprises. It trades about -0.32 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.05 per unit of volatility. If you would invest 108.00 in Globex Mining Enterprises on August 25, 2024 and sell it today you would earn a total of 2.00 from holding Globex Mining Enterprises or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Majestic Silver vs. Globex Mining Enterprises
Performance |
| Timeline |
| First Majestic Silver |
| Globex Mining Enterprises |
First Majestic and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Globex Mining
The main advantage of trading using opposite First Majestic and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
| Globex Mining vs. First Majestic Silver | Globex Mining vs. Ivanhoe Energy | Globex Mining vs. Orezone Gold Corp | Globex Mining vs. Faraday Copper 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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