Correlation Between First Majestic and Serabi Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Serabi Gold 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 Serabi Gold 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 Serabi Gold PLC, you can compare the effects of market volatilities on First Majestic and Serabi Gold 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 Serabi Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Serabi Gold.
Diversification Opportunities for First Majestic and Serabi Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Serabi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Serabi Gold PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serabi Gold PLC 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 Serabi Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serabi Gold PLC has no effect on the direction of First Majestic i.e., First Majestic and Serabi Gold go up and down completely randomly.
Pair Corralation between First Majestic and Serabi Gold
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Serabi Gold. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.32 times less risky than Serabi Gold. The stock trades about -0.32 of its potential returns per unit of risk. The Serabi Gold PLC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Serabi Gold PLC on August 25, 2024 and sell it today you would lose (7.00) from holding Serabi Gold PLC or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Serabi Gold PLC
Performance |
| Timeline |
| First Majestic Silver |
| Serabi Gold PLC |
First Majestic and Serabi Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Serabi Gold
The main advantage of trading using opposite First Majestic and Serabi Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Serabi Gold 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 Serabi Gold will offset losses from the drop in Serabi Gold's long position.| First Majestic vs. Reliq Health Technologies | First Majestic vs. Wilmington Capital Management | First Majestic vs. TUT Fitness Group | First Majestic vs. iSign Media Solutions |
| Serabi Gold vs. Plata Latina Minerals | Serabi Gold vs. RT Minerals Corp | Serabi Gold vs. Rackla Metals | Serabi Gold vs. Sulliden Minerals SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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