Correlation Between First Majestic and Tesoro Minerals
Can any of the company-specific risk be diversified away by investing in both First Majestic and Tesoro Minerals 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 Tesoro Minerals 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 Tesoro Minerals Corp, you can compare the effects of market volatilities on First Majestic and Tesoro Minerals 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 Tesoro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Tesoro Minerals.
Diversification Opportunities for First Majestic and Tesoro Minerals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Tesoro is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Tesoro Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesoro Minerals Corp 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 Tesoro Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesoro Minerals Corp has no effect on the direction of First Majestic i.e., First Majestic and Tesoro Minerals go up and down completely randomly.
Pair Corralation between First Majestic and Tesoro Minerals
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.63 times more return on investment than Tesoro Minerals. However, First Majestic Silver is 1.58 times less risky than Tesoro Minerals. It trades about -0.02 of its potential returns per unit of risk. Tesoro Minerals Corp is currently generating about -0.16 per unit of risk. If you would invest 850.00 in First Majestic Silver on October 26, 2024 and sell it today you would lose (43.00) from holding First Majestic Silver or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Tesoro Minerals Corp
Performance |
| Timeline |
| First Majestic Silver |
| Tesoro Minerals Corp |
First Majestic and Tesoro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Tesoro Minerals
The main advantage of trading using opposite First Majestic and Tesoro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Tesoro Minerals 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 Tesoro Minerals will offset losses from the drop in Tesoro Minerals' long position.| First Majestic vs. Computer Modelling Group | First Majestic vs. Profound Medical Corp | First Majestic vs. Rogers Communications | First Majestic vs. Chemtrade Logistics Income |
| Tesoro Minerals vs. Pace Metals | Tesoro Minerals vs. Profound Medical Corp | Tesoro Minerals vs. Quipt Home Medical | Tesoro Minerals vs. Information Services |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |