Correlation Between Eskay Mining and First Majestic
Can any of the company-specific risk be diversified away by investing in both Eskay 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 Eskay 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 Eskay Mining Corp and First Majestic Silver, you can compare the effects of market volatilities on Eskay 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 Eskay Mining with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and First Majestic.
Diversification Opportunities for Eskay Mining and First Majestic
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eskay and First is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp 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 Eskay 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 Eskay Mining Corp 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 Eskay Mining i.e., Eskay Mining and First Majestic go up and down completely randomly.
Pair Corralation between Eskay Mining and First Majestic
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the First Majestic. In addition to that, Eskay Mining is 1.58 times more volatile than First Majestic Silver. It trades about -0.04 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of volatility. If you would invest 1,182 in First Majestic Silver on September 12, 2024 and sell it today you would lose (274.00) from holding First Majestic Silver or give up 23.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. First Majestic Silver
Performance |
| Timeline |
| Eskay Mining Corp |
| First Majestic Silver |
Eskay Mining and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and First Majestic
The main advantage of trading using opposite Eskay Mining and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay 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.| Eskay Mining vs. Ressources Minieres Radisson | Eskay Mining vs. Galantas Gold Corp | Eskay Mining vs. Red Pine Exploration | Eskay Mining vs. Kore Mining |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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