Correlation Between First Majestic and Chester Mining
Can any of the company-specific risk be diversified away by investing in both First Majestic and Chester Mining 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 Chester Mining 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 Chester Mining, you can compare the effects of market volatilities on First Majestic and Chester Mining 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 Chester Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Chester Mining.
Diversification Opportunities for First Majestic and Chester Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Chester is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Chester Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chester Mining 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 Chester Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chester Mining has no effect on the direction of First Majestic i.e., First Majestic and Chester Mining go up and down completely randomly.
Pair Corralation between First Majestic and Chester Mining
If you would invest 678.00 in First Majestic Silver on September 12, 2024 and sell it today you would lose (29.00) from holding First Majestic Silver or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Chester Mining
Performance |
| Timeline |
| First Majestic Silver |
| Chester Mining |
First Majestic and Chester Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Chester Mining
The main advantage of trading using opposite First Majestic and Chester Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Chester Mining 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 Chester Mining will offset losses from the drop in Chester Mining'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 |
| Chester Mining vs. Pan American Silver | Chester Mining vs. First Majestic Silver | Chester Mining vs. MAG Silver Corp | Chester Mining vs. Silvercorp Metals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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