Correlation Between First Majestic and Stillwater Critical
Can any of the company-specific risk be diversified away by investing in both First Majestic and Stillwater Critical 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 Stillwater Critical 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 Stillwater Critical Minerals, you can compare the effects of market volatilities on First Majestic and Stillwater Critical 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 Stillwater Critical. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Stillwater Critical.
Diversification Opportunities for First Majestic and Stillwater Critical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Stillwater is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Stillwater Critical Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stillwater Critical 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 Stillwater Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stillwater Critical has no effect on the direction of First Majestic i.e., First Majestic and Stillwater Critical go up and down completely randomly.
Pair Corralation between First Majestic and Stillwater Critical
Assuming the 90 days horizon First Majestic Silver is expected to generate 1.02 times more return on investment than Stillwater Critical. However, First Majestic is 1.02 times more volatile than Stillwater Critical Minerals. It trades about 0.1 of its potential returns per unit of risk. Stillwater Critical Minerals is currently generating about -0.2 per unit of risk. If you would invest 759.00 in First Majestic Silver on November 27, 2024 and sell it today you would earn a total of 48.00 from holding First Majestic Silver or generate 6.32% 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. Stillwater Critical Minerals
Performance |
| Timeline |
| First Majestic Silver |
| Stillwater Critical |
First Majestic and Stillwater Critical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Stillwater Critical
The main advantage of trading using opposite First Majestic and Stillwater Critical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Stillwater Critical 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 Stillwater Critical will offset losses from the drop in Stillwater Critical's long position.| First Majestic vs. Ivanhoe Energy | First Majestic vs. Flinders Resources Limited | First Majestic vs. Orezone Gold Corp | First Majestic vs. Faraday Copper Corp |
| Stillwater Critical vs. Grid Metals Corp | Stillwater Critical vs. Strikepoint Gold | Stillwater Critical vs. New Age Metals | Stillwater Critical vs. Grande Portage Resources |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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