Correlation Between First Majestic and Jade Leader
Can any of the company-specific risk be diversified away by investing in both First Majestic and Jade Leader 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 Jade Leader 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 Jade Leader Corp, you can compare the effects of market volatilities on First Majestic and Jade Leader 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 Jade Leader. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Jade Leader.
Diversification Opportunities for First Majestic and Jade Leader
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Jade is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Jade Leader Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Leader Corp 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 Jade Leader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Leader Corp has no effect on the direction of First Majestic i.e., First Majestic and Jade Leader go up and down completely randomly.
Pair Corralation between First Majestic and Jade Leader
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.72 times more return on investment than Jade Leader. However, First Majestic Silver is 1.4 times less risky than Jade Leader. It trades about 0.03 of its potential returns per unit of risk. Jade Leader Corp is currently generating about -0.15 per unit of risk. If you would invest 851.00 in First Majestic Silver on August 28, 2024 and sell it today you would earn a total of 14.00 from holding First Majestic Silver or generate 1.65% 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. Jade Leader Corp
Performance |
| Timeline |
| First Majestic Silver |
| Jade Leader Corp |
First Majestic and Jade Leader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Jade Leader
The main advantage of trading using opposite First Majestic and Jade Leader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Jade Leader 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 Jade Leader will offset losses from the drop in Jade Leader's long position.| First Majestic vs. 2028 Investment Grade | First Majestic vs. Western Investment | First Majestic vs. Atrium Mortgage Investment | First Majestic vs. Air Canada |
| Jade Leader vs. First Majestic Silver | Jade Leader vs. Ivanhoe Energy | Jade Leader vs. Orezone Gold Corp | Jade Leader 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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