Correlation Between First Majestic and Stella Jones
Can any of the company-specific risk be diversified away by investing in both First Majestic and Stella Jones 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 Stella Jones 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 Stella Jones, you can compare the effects of market volatilities on First Majestic and Stella Jones 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 Stella Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Stella Jones.
Diversification Opportunities for First Majestic and Stella Jones
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Stella is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Stella Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stella Jones 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 Stella Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stella Jones has no effect on the direction of First Majestic i.e., First Majestic and Stella Jones go up and down completely randomly.
Pair Corralation between First Majestic and Stella Jones
Assuming the 90 days horizon First Majestic is expected to generate 2.35 times less return on investment than Stella Jones. In addition to that, First Majestic is 1.87 times more volatile than Stella Jones. It trades about 0.01 of its total potential returns per unit of risk. Stella Jones is currently generating about 0.05 per unit of volatility. If you would invest 4,774 in Stella Jones on November 2, 2024 and sell it today you would earn a total of 2,336 from holding Stella Jones or generate 48.93% 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. Stella Jones
Performance |
| Timeline |
| First Majestic Silver |
| Stella Jones |
First Majestic and Stella Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Stella Jones
The main advantage of trading using opposite First Majestic and Stella Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Stella Jones 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 Stella Jones will offset losses from the drop in Stella Jones' long position.| First Majestic vs. Diamond Estates Wines | First Majestic vs. Farstarcap Investment Corp | First Majestic vs. Metalero Mining Corp | First Majestic vs. Mako Mining Corp |
| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
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 CEOs Directory module to screen CEOs from public companies around the world.
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