Correlation Between First Majestic and PJX Resources
Can any of the company-specific risk be diversified away by investing in both First Majestic and PJX Resources 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 PJX Resources 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 PJX Resources, you can compare the effects of market volatilities on First Majestic and PJX Resources 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 PJX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and PJX Resources.
Diversification Opportunities for First Majestic and PJX Resources
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and PJX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and PJX Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJX Resources 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 PJX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJX Resources has no effect on the direction of First Majestic i.e., First Majestic and PJX Resources go up and down completely randomly.
Pair Corralation between First Majestic and PJX Resources
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the PJX Resources. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 2.86 times less risky than PJX Resources. The stock trades about -0.3 of its potential returns per unit of risk. The PJX Resources is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 14.00 in PJX Resources on August 29, 2024 and sell it today you would lose (3.00) from holding PJX Resources or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. PJX Resources
Performance |
| Timeline |
| First Majestic Silver |
| PJX Resources |
First Majestic and PJX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and PJX Resources
The main advantage of trading using opposite First Majestic and PJX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, PJX Resources 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 PJX Resources will offset losses from the drop in PJX Resources' 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 |
| PJX Resources vs. First Majestic Silver | PJX Resources vs. Ivanhoe Energy | PJX Resources vs. Orezone Gold Corp | PJX Resources 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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