Correlation Between First Majestic and Minera Alamos
Can any of the company-specific risk be diversified away by investing in both First Majestic and Minera Alamos 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 Minera Alamos 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 Minera Alamos, you can compare the effects of market volatilities on First Majestic and Minera Alamos 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 Minera Alamos. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Minera Alamos.
Diversification Opportunities for First Majestic and Minera Alamos
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Minera is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Minera Alamos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minera Alamos 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 Minera Alamos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minera Alamos has no effect on the direction of First Majestic i.e., First Majestic and Minera Alamos go up and down completely randomly.
Pair Corralation between First Majestic and Minera Alamos
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Minera Alamos. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.11 times less risky than Minera Alamos. The stock trades about 0.0 of its potential returns per unit of risk. The Minera Alamos is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Minera Alamos on August 26, 2024 and sell it today you would lose (13.00) from holding Minera Alamos or give up 30.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Minera Alamos
Performance |
| Timeline |
| First Majestic Silver |
| Minera Alamos |
First Majestic and Minera Alamos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Minera Alamos
The main advantage of trading using opposite First Majestic and Minera Alamos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Minera Alamos 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 Minera Alamos will offset losses from the drop in Minera Alamos' long position.| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
| Minera Alamos vs. First Majestic Silver | Minera Alamos vs. Ivanhoe Energy | Minera Alamos vs. Orezone Gold Corp | Minera Alamos 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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