Correlation Between First Majestic and Silver Bear
Can any of the company-specific risk be diversified away by investing in both First Majestic and Silver Bear 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 Silver Bear 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 Silver Bear Resources, you can compare the effects of market volatilities on First Majestic and Silver Bear 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 Silver Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Silver Bear.
Diversification Opportunities for First Majestic and Silver Bear
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Silver is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Silver Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bear 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 Silver Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bear Resources has no effect on the direction of First Majestic i.e., First Majestic and Silver Bear go up and down completely randomly.
Pair Corralation between First Majestic and Silver Bear
If you would invest 1,182 in First Majestic Silver on September 12, 2024 and sell it today you would lose (274.00) from holding First Majestic Silver or give up 23.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Silver Bear Resources
Performance |
| Timeline |
| First Majestic Silver |
| Silver Bear Resources |
First Majestic and Silver Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Silver Bear
The main advantage of trading using opposite First Majestic and Silver Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Silver Bear 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 Silver Bear will offset losses from the drop in Silver Bear's long position.| First Majestic vs. Wishpond Technologies | First Majestic vs. 2028 Investment Grade | First Majestic vs. Tree Island Steel | First Majestic vs. Advent Wireless |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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