Correlation Between Benton Resources and First Majestic
Can any of the company-specific risk be diversified away by investing in both Benton Resources 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 Benton Resources and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benton Resources and First Majestic Silver, you can compare the effects of market volatilities on Benton Resources 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 Benton Resources with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benton Resources and First Majestic.
Diversification Opportunities for Benton Resources and First Majestic
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Benton and First is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Benton Resources 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 Benton Resources 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 Benton Resources 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 Benton Resources i.e., Benton Resources and First Majestic go up and down completely randomly.
Pair Corralation between Benton Resources and First Majestic
Assuming the 90 days horizon Benton Resources is expected to under-perform the First Majestic. In addition to that, Benton Resources is 1.89 times more volatile than First Majestic Silver. It trades about -0.02 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.09 per unit of volatility. If you would invest 864.00 in First Majestic Silver on September 12, 2024 and sell it today you would earn a total of 44.00 from holding First Majestic Silver or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benton Resources vs. First Majestic Silver
Performance |
| Timeline |
| Benton Resources |
| First Majestic Silver |
Benton Resources and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benton Resources and First Majestic
The main advantage of trading using opposite Benton Resources and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benton Resources 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.| Benton Resources vs. Avrupa Minerals | Benton Resources vs. Maritime Resources Corp | Benton Resources vs. Chibougamau Independent Mines | Benton Resources vs. Angkor Resources Corp |
| First Majestic vs. Wishpond Technologies | First Majestic vs. 2028 Investment Grade | First Majestic vs. Tree Island Steel | First Majestic vs. Advent Wireless |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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