Correlation Between Commander Resources and First Majestic
Can any of the company-specific risk be diversified away by investing in both Commander 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 Commander 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 Commander Resources and First Majestic Silver, you can compare the effects of market volatilities on Commander 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 Commander Resources with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commander Resources and First Majestic.
Diversification Opportunities for Commander Resources and First Majestic
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commander and First is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Commander 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 Commander 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 Commander 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 Commander Resources i.e., Commander Resources and First Majestic go up and down completely randomly.
Pair Corralation between Commander Resources and First Majestic
Assuming the 90 days horizon Commander Resources is expected to generate 2.92 times more return on investment than First Majestic. However, Commander Resources is 2.92 times more volatile than First Majestic Silver. It trades about 0.11 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.13 per unit of risk. If you would invest 7.00 in Commander Resources on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Commander Resources or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commander Resources vs. First Majestic Silver
Performance |
| Timeline |
| Commander Resources |
| First Majestic Silver |
Commander Resources and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commander Resources and First Majestic
The main advantage of trading using opposite Commander Resources and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commander 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.| Commander Resources vs. Foraco International SA | Commander Resources vs. Geodrill Limited | Commander Resources vs. Major Drilling Group | Commander Resources vs. Bri Chem Corp |
| First Majestic vs. Ivanhoe Energy | First Majestic vs. Orezone Gold Corp | First Majestic vs. Faraday Copper 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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