Correlation Between First Majestic and Blue Moon
Can any of the company-specific risk be diversified away by investing in both First Majestic and Blue Moon 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 Blue Moon 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 Blue Moon Zinc, you can compare the effects of market volatilities on First Majestic and Blue Moon 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 Blue Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Blue Moon.
Diversification Opportunities for First Majestic and Blue Moon
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Blue is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Blue Moon Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Moon Zinc 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 Blue Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Moon Zinc has no effect on the direction of First Majestic i.e., First Majestic and Blue Moon go up and down completely randomly.
Pair Corralation between First Majestic and Blue Moon
If you would invest 36.00 in Blue Moon Zinc on October 28, 2024 and sell it today you would earn a total of 0.00 from holding Blue Moon Zinc or generate 0.0% 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. Blue Moon Zinc
Performance |
| Timeline |
| First Majestic Silver |
| Blue Moon Zinc |
First Majestic and Blue Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Blue Moon
The main advantage of trading using opposite First Majestic and Blue Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Blue Moon 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 Blue Moon will offset losses from the drop in Blue Moon's long position.| First Majestic vs. Postmedia Network Canada | First Majestic vs. Overactive Media Corp | First Majestic vs. Brookfield Asset Management | First Majestic vs. Maple Leaf Foods |
| Blue Moon vs. Transatlantic Mining Corp | Blue Moon vs. Opus One Resources | Blue Moon vs. Grosvenor Resource 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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