Correlation Between Beowulf Mining and First Majestic
Can any of the company-specific risk be diversified away by investing in both Beowulf Mining and First Majestic 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 Beowulf Mining and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beowulf Mining and First Majestic Silver, you can compare the effects of market volatilities on Beowulf Mining and First Majestic 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 Beowulf Mining with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and First Majestic.
Diversification Opportunities for Beowulf Mining and First Majestic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beowulf and First is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and Beowulf Mining 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 Beowulf Mining are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Beowulf Mining i.e., Beowulf Mining and First Majestic go up and down completely randomly.
Pair Corralation between Beowulf Mining and First Majestic
Assuming the 90 days trading horizon Beowulf Mining is expected to under-perform the First Majestic. But the stock apears to be less risky and, when comparing its historical volatility, Beowulf Mining is 1.09 times less risky than First Majestic. The stock trades about -0.08 of its potential returns per unit of risk. The First Majestic Silver is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 718.00 in First Majestic Silver on November 2, 2024 and sell it today you would earn a total of 134.00 from holding First Majestic Silver or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beowulf Mining vs. First Majestic Silver
Performance |
| Timeline |
| Beowulf Mining |
| First Majestic Silver |
Beowulf Mining and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beowulf Mining and First Majestic
The main advantage of trading using opposite Beowulf Mining and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Beowulf Mining vs. Givaudan SA | Beowulf Mining vs. Antofagasta PLC | Beowulf Mining vs. Ferrexpo PLC | Beowulf Mining vs. Atalaya Mining |
| First Majestic vs. Live Nation Entertainment | First Majestic vs. Flutter Entertainment PLC | First Majestic vs. Morgan Advanced Materials | First Majestic vs. G5 Entertainment AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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