Correlation Between First Majestic and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both First Majestic and SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals, you can compare the effects of market volatilities on First Majestic and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and SilverCrest Metals.
Diversification Opportunities for First Majestic and SilverCrest Metals
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and SilverCrest is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of First Majestic i.e., First Majestic and SilverCrest Metals go up and down completely randomly.
Pair Corralation between First Majestic and SilverCrest Metals
Assuming the 90 days horizon First Majestic is expected to generate 1.16 times less return on investment than SilverCrest Metals. In addition to that, First Majestic is 1.03 times more volatile than SilverCrest Metals. It trades about 0.13 of its total potential returns per unit of risk. SilverCrest Metals is currently generating about 0.15 per unit of volatility. If you would invest 1,324 in SilverCrest Metals on October 23, 2024 and sell it today you would earn a total of 110.00 from holding SilverCrest Metals or generate 8.31% 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. SilverCrest Metals
Performance |
| Timeline |
| First Majestic Silver |
| SilverCrest Metals |
First Majestic and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and SilverCrest Metals
The main advantage of trading using opposite First Majestic and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| First Majestic vs. Dream Office Real | First Majestic vs. Cogeco Communications | First Majestic vs. Blackrock Silver Corp | First Majestic vs. Computer Modelling Group |
| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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