Correlation Between First Majestic and Sego Resources
Can any of the company-specific risk be diversified away by investing in both First Majestic and Sego 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 Sego 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 Sego Resources, you can compare the effects of market volatilities on First Majestic and Sego 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 Sego Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Sego Resources.
Diversification Opportunities for First Majestic and Sego Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Sego is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Sego Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sego 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 Sego Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sego Resources has no effect on the direction of First Majestic i.e., First Majestic and Sego Resources go up and down completely randomly.
Pair Corralation between First Majestic and Sego Resources
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Sego Resources. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 5.04 times less risky than Sego Resources. The stock trades about -0.35 of its potential returns per unit of risk. The Sego Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Sego Resources on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Sego Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Sego Resources
Performance |
| Timeline |
| First Majestic Silver |
| Sego Resources |
First Majestic and Sego Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Sego Resources
The main advantage of trading using opposite First Majestic and Sego Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Sego 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 Sego Resources will offset losses from the drop in Sego Resources' long position.| First Majestic vs. Nova Leap Health | First Majestic vs. Leveljump Healthcare Corp | First Majestic vs. Perseus Mining | First Majestic vs. CVS HEALTH CDR |
| Sego Resources vs. Solar Alliance Energy | Sego Resources vs. Global X Active | Sego Resources vs. Financial 15 Split | Sego Resources vs. Rubicon Organics |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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