Correlation Between BonTerra Resources and First Majestic
Can any of the company-specific risk be diversified away by investing in both BonTerra 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 BonTerra 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 BonTerra Resources and First Majestic Silver, you can compare the effects of market volatilities on BonTerra 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 BonTerra Resources with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BonTerra Resources and First Majestic.
Diversification Opportunities for BonTerra Resources and First Majestic
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BonTerra and First is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding BonTerra 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 BonTerra 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 BonTerra 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 BonTerra Resources i.e., BonTerra Resources and First Majestic go up and down completely randomly.
Pair Corralation between BonTerra Resources and First Majestic
Assuming the 90 days horizon BonTerra Resources is expected to generate 1.49 times more return on investment than First Majestic. However, BonTerra Resources is 1.49 times more volatile than First Majestic Silver. It trades about 0.02 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 27.00 in BonTerra Resources on September 3, 2024 and sell it today you would lose (3.00) from holding BonTerra Resources or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BonTerra Resources vs. First Majestic Silver
Performance |
| Timeline |
| BonTerra Resources |
| First Majestic Silver |
BonTerra Resources and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BonTerra Resources and First Majestic
The main advantage of trading using opposite BonTerra Resources and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BonTerra 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.| BonTerra Resources vs. Cartier Resources | BonTerra Resources vs. Galway Metals | BonTerra Resources vs. Aurion Resources | BonTerra Resources vs. Minaurum Gold |
| First Majestic vs. Precious Metals And | First Majestic vs. Thunderbird Entertainment Group | First Majestic vs. CNJ Capital Investments | First Majestic vs. Arbor Metals 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 CEOs Directory module to screen CEOs from public companies around the world.
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