Correlation Between First Majestic and Synalloy
Can any of the company-specific risk be diversified away by investing in both First Majestic and Synalloy 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 Synalloy 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 Synalloy, you can compare the effects of market volatilities on First Majestic and Synalloy 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 Synalloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Synalloy.
Diversification Opportunities for First Majestic and Synalloy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Synalloy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Synalloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synalloy 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 Synalloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synalloy has no effect on the direction of First Majestic i.e., First Majestic and Synalloy go up and down completely randomly.
Pair Corralation between First Majestic and Synalloy
Allowing for the 90-day total investment horizon First Majestic Silver is expected to under-perform the Synalloy. In addition to that, First Majestic is 1.98 times more volatile than Synalloy. It trades about -0.29 of its total potential returns per unit of risk. Synalloy is currently generating about 0.27 per unit of volatility. If you would invest 949.00 in Synalloy on August 24, 2024 and sell it today you would earn a total of 84.00 from holding Synalloy or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Synalloy
Performance |
| Timeline |
| First Majestic Silver |
| Synalloy |
First Majestic and Synalloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Synalloy
The main advantage of trading using opposite First Majestic and Synalloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Synalloy 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 Synalloy will offset losses from the drop in Synalloy's long position.| First Majestic vs. Aya Gold Silver | First Majestic vs. Silvercorp Metals | First Majestic vs. Discovery Metals Corp | First Majestic vs. Bald Eagle Gold |
| Synalloy vs. Grupo Simec SAB | Synalloy vs. Mesabi Trust | Synalloy vs. Algoma Steel Group | Synalloy vs. Aperam PK |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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