Correlation Between First Majestic and Silver Grail
Can any of the company-specific risk be diversified away by investing in both First Majestic and Silver Grail 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 Grail 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 Grail Resources, you can compare the effects of market volatilities on First Majestic and Silver Grail 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 Grail. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Silver Grail.
Diversification Opportunities for First Majestic and Silver Grail
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Silver is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Silver Grail Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Grail 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 Grail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Grail Resources has no effect on the direction of First Majestic i.e., First Majestic and Silver Grail go up and down completely randomly.
Pair Corralation between First Majestic and Silver Grail
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.73 times more return on investment than Silver Grail. However, First Majestic Silver is 1.37 times less risky than Silver Grail. It trades about -0.29 of its potential returns per unit of risk. Silver Grail Resources is currently generating about -0.31 per unit of risk. If you would invest 1,028 in First Majestic Silver on September 1, 2024 and sell it today you would lose (160.00) from holding First Majestic Silver or give up 15.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Silver Grail Resources
Performance |
| Timeline |
| First Majestic Silver |
| Silver Grail Resources |
First Majestic and Silver Grail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Silver Grail
The main advantage of trading using opposite First Majestic and Silver Grail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Silver Grail 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 Grail will offset losses from the drop in Silver Grail's long position.| First Majestic vs. Slate Grocery REIT | First Majestic vs. Toronto Dominion Bank | First Majestic vs. Enduro Metals Corp | First Majestic vs. Intact Financial Corp |
| Silver Grail vs. Minaurum Gold | Silver Grail vs. Dolly Varden Silver | Silver Grail vs. Santacruz Silv | Silver Grail vs. GoGold Resources |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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