Correlation Between First Majestic and Honey Badger
Can any of the company-specific risk be diversified away by investing in both First Majestic and Honey Badger 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 Honey Badger 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 Honey Badger Silver, you can compare the effects of market volatilities on First Majestic and Honey Badger 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 Honey Badger. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Honey Badger.
Diversification Opportunities for First Majestic and Honey Badger
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and Honey is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Honey Badger Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honey Badger Silver 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 Honey Badger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honey Badger Silver has no effect on the direction of First Majestic i.e., First Majestic and Honey Badger go up and down completely randomly.
Pair Corralation between First Majestic and Honey Badger
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.63 times more return on investment than Honey Badger. However, First Majestic Silver is 1.59 times less risky than Honey Badger. It trades about -0.02 of its potential returns per unit of risk. Honey Badger Silver is currently generating about -0.04 per unit of risk. If you would invest 844.00 in First Majestic Silver on December 11, 2024 and sell it today you would lose (44.00) from holding First Majestic Silver or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Honey Badger Silver
Performance |
| Timeline |
| First Majestic Silver |
| Honey Badger Silver |
First Majestic and Honey Badger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Honey Badger
The main advantage of trading using opposite First Majestic and Honey Badger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Honey Badger 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 Honey Badger will offset losses from the drop in Honey Badger's long position.| First Majestic vs. Micron Technology, | First Majestic vs. CVS HEALTH CDR | First Majestic vs. NeuPath Health | First Majestic vs. Bausch Health Companies |
| Honey Badger vs. Monarca Minerals | Honey Badger vs. Hawkeye Gold and | Honey Badger vs. CANEX Metals | Honey Badger vs. Inventus Mining 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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