Correlation Between First Majestic and Gratomic
Can any of the company-specific risk be diversified away by investing in both First Majestic and Gratomic 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 Gratomic 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 Gratomic, you can compare the effects of market volatilities on First Majestic and Gratomic 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 Gratomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Gratomic.
Diversification Opportunities for First Majestic and Gratomic
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Gratomic is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Gratomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gratomic 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 Gratomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gratomic has no effect on the direction of First Majestic i.e., First Majestic and Gratomic go up and down completely randomly.
Pair Corralation between First Majestic and Gratomic
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.51 times more return on investment than Gratomic. However, First Majestic Silver is 1.97 times less risky than Gratomic. It trades about 0.01 of its potential returns per unit of risk. Gratomic is currently generating about -0.02 per unit of risk. If you would invest 943.00 in First Majestic Silver on August 26, 2024 and sell it today you would lose (62.00) from holding First Majestic Silver or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Gratomic
Performance |
| Timeline |
| First Majestic Silver |
| Gratomic |
First Majestic and Gratomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Gratomic
The main advantage of trading using opposite First Majestic and Gratomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Gratomic 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 Gratomic will offset losses from the drop in Gratomic'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 |
| Gratomic vs. First Majestic Silver | Gratomic vs. Ivanhoe Energy | Gratomic vs. Orezone Gold Corp | Gratomic 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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