Correlation Between First Majestic and Westhaven Ventures
Can any of the company-specific risk be diversified away by investing in both First Majestic and Westhaven Ventures 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 Westhaven Ventures 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 Westhaven Ventures, you can compare the effects of market volatilities on First Majestic and Westhaven Ventures 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 Westhaven Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Westhaven Ventures.
Diversification Opportunities for First Majestic and Westhaven Ventures
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Westhaven is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Westhaven Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westhaven Ventures 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 Westhaven Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westhaven Ventures has no effect on the direction of First Majestic i.e., First Majestic and Westhaven Ventures go up and down completely randomly.
Pair Corralation between First Majestic and Westhaven Ventures
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Westhaven Ventures. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 2.04 times less risky than Westhaven Ventures. The stock trades about -0.32 of its potential returns per unit of risk. The Westhaven Ventures is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Westhaven Ventures on August 25, 2024 and sell it today you would lose (1.00) from holding Westhaven Ventures or give up 7.14% 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. Westhaven Ventures
Performance |
| Timeline |
| First Majestic Silver |
| Westhaven Ventures |
First Majestic and Westhaven Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Westhaven Ventures
The main advantage of trading using opposite First Majestic and Westhaven Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Westhaven Ventures 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 Westhaven Ventures will offset losses from the drop in Westhaven Ventures' long position.| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
| Westhaven Ventures vs. First Majestic Silver | Westhaven Ventures vs. Ivanhoe Energy | Westhaven Ventures vs. Orezone Gold Corp | Westhaven Ventures vs. Faraday Copper 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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