Correlation Between First Majestic and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both First Majestic and Silvercorp Metals 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 First Majestic and Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and Silvercorp Metals, you can compare the effects of market volatilities on First Majestic and Silvercorp Metals 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 First Majestic with a short position of Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Silvercorp Metals.
Diversification Opportunities for First Majestic and Silvercorp Metals
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Silvercorp is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals and First Majestic 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 First Majestic Silver are associated (or correlated) with Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of First Majestic i.e., First Majestic and Silvercorp Metals go up and down completely randomly.
Pair Corralation between First Majestic and Silvercorp Metals
Assuming the 90 days horizon First Majestic Silver is expected to generate 1.64 times more return on investment than Silvercorp Metals. However, First Majestic is 1.64 times more volatile than Silvercorp Metals. It trades about -0.12 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.23 per unit of risk. If you would invest 605.00 in First Majestic Silver on September 23, 2024 and sell it today you would lose (65.00) from holding First Majestic Silver or give up 10.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Silvercorp Metals
Performance |
| Timeline |
| First Majestic Silver |
| Silvercorp Metals |
First Majestic and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Silvercorp Metals
The main advantage of trading using opposite First Majestic and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| First Majestic vs. Pan American Silver | First Majestic vs. MAG Silver Corp | First Majestic vs. Silvercorp Metals | First Majestic vs. Endeavour Silver Corp |
| Silvercorp Metals vs. Pan American Silver | Silvercorp Metals vs. First Majestic Silver | Silvercorp Metals vs. MAG Silver Corp | Silvercorp Metals vs. Endeavour Silver 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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