Correlation Between First Majestic and Kore Mining
Can any of the company-specific risk be diversified away by investing in both First Majestic and Kore 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 Kore 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 Kore Mining, you can compare the effects of market volatilities on First Majestic and Kore 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 Kore Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Kore Mining.
Diversification Opportunities for First Majestic and Kore Mining
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Kore is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Kore Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kore Mining 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 Kore Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kore Mining has no effect on the direction of First Majestic i.e., First Majestic and Kore Mining go up and down completely randomly.
Pair Corralation between First Majestic and Kore Mining
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Kore Mining. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 3.4 times less risky than Kore Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Kore Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Kore Mining on August 29, 2024 and sell it today you would earn a total of 1.50 from holding Kore Mining or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Kore Mining
Performance |
| Timeline |
| First Majestic Silver |
| Kore Mining |
First Majestic and Kore Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Kore Mining
The main advantage of trading using opposite First Majestic and Kore Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Kore 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 Kore Mining will offset losses from the drop in Kore Mining's long position.| First Majestic vs. Talon Metals Corp | First Majestic vs. Champion Gaming Group | First Majestic vs. SalesforceCom CDR | First Majestic vs. Gfl Environmental Holdings |
| Kore Mining vs. Outcrop Gold Corp | Kore Mining vs. Grande Portage Resources | Kore Mining vs. Bluestone Resources | Kore Mining vs. Lumina Gold 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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