Correlation Between First Majestic and Hannan Metals
Can any of the company-specific risk be diversified away by investing in both First Majestic and Hannan Metals 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 Hannan Metals 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 Hannan Metals, you can compare the effects of market volatilities on First Majestic and Hannan Metals 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 Hannan Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Hannan Metals.
Diversification Opportunities for First Majestic and Hannan Metals
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Hannan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Hannan Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannan Metals 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 Hannan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannan Metals has no effect on the direction of First Majestic i.e., First Majestic and Hannan Metals go up and down completely randomly.
Pair Corralation between First Majestic and Hannan Metals
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Hannan Metals. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 2.22 times less risky than Hannan Metals. The stock trades about -0.29 of its potential returns per unit of risk. The Hannan Metals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Hannan Metals on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Hannan Metals or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Hannan Metals
Performance |
| Timeline |
| First Majestic Silver |
| Hannan Metals |
First Majestic and Hannan Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Hannan Metals
The main advantage of trading using opposite First Majestic and Hannan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Hannan Metals 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 Hannan Metals will offset losses from the drop in Hannan Metals' 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 |
| Hannan Metals vs. Kiplin Metals | Hannan Metals vs. Pure Energy Minerals | Hannan Metals vs. Noram Lithium Corp | Hannan Metals vs. Minnova 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |