Correlation Between First Majestic and Northwest Copper
Can any of the company-specific risk be diversified away by investing in both First Majestic and Northwest Copper 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 Northwest Copper 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 Northwest Copper Corp, you can compare the effects of market volatilities on First Majestic and Northwest Copper 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 Northwest Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Northwest Copper.
Diversification Opportunities for First Majestic and Northwest Copper
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Northwest is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Northwest Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Copper 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 Northwest Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Copper Corp has no effect on the direction of First Majestic i.e., First Majestic and Northwest Copper go up and down completely randomly.
Pair Corralation between First Majestic and Northwest Copper
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.38 times more return on investment than Northwest Copper. However, First Majestic Silver is 2.63 times less risky than Northwest Copper. It trades about 0.03 of its potential returns per unit of risk. Northwest Copper Corp is currently generating about -0.17 per unit of risk. If you would invest 859.00 in First Majestic Silver on November 2, 2024 and sell it today you would earn a total of 8.00 from holding First Majestic Silver or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Northwest Copper Corp
Performance |
| Timeline |
| First Majestic Silver |
| Northwest Copper Corp |
First Majestic and Northwest Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Northwest Copper
The main advantage of trading using opposite First Majestic and Northwest Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Northwest Copper 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 Northwest Copper will offset losses from the drop in Northwest Copper's long position.| First Majestic vs. CNJ Capital Investments | First Majestic vs. Rogers Communications | First Majestic vs. Cogeco Communications | First Majestic vs. Aya Gold Silver |
| Northwest Copper vs. First Majestic Silver | Northwest Copper vs. Ivanhoe Energy | Northwest Copper vs. Flinders Resources Limited | Northwest Copper vs. Orezone 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |