Correlation Between First Majestic and SSR Mining
Can any of the company-specific risk be diversified away by investing in both First Majestic and SSR Mining 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 SSR Mining 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 SSR Mining, you can compare the effects of market volatilities on First Majestic and SSR Mining 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 SSR Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and SSR Mining.
Diversification Opportunities for First Majestic and SSR Mining
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and SSR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and SSR Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Mining 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 SSR Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Mining has no effect on the direction of First Majestic i.e., First Majestic and SSR Mining go up and down completely randomly.
Pair Corralation between First Majestic and SSR Mining
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the SSR Mining. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.04 times less risky than SSR Mining. The stock trades about -0.03 of its potential returns per unit of risk. The SSR Mining is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 804.00 in SSR Mining on November 26, 2024 and sell it today you would earn a total of 654.00 from holding SSR Mining or generate 81.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Majestic Silver vs. SSR Mining
Performance |
Timeline |
First Majestic Silver |
SSR Mining |
First Majestic and SSR Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Majestic and SSR Mining
The main advantage of trading using opposite First Majestic and SSR Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, SSR Mining 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 SSR Mining will offset losses from the drop in SSR Mining's long position.First Majestic vs. Ivanhoe Energy | ||
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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