Correlation Between First Majestic and ALPEK SAB
Can any of the company-specific risk be diversified away by investing in both First Majestic and ALPEK SAB 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 ALPEK SAB 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 ALPEK SAB de, you can compare the effects of market volatilities on First Majestic and ALPEK SAB 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 ALPEK SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and ALPEK SAB.
Diversification Opportunities for First Majestic and ALPEK SAB
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and ALPEK is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and ALPEK SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPEK SAB de 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 ALPEK SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPEK SAB de has no effect on the direction of First Majestic i.e., First Majestic and ALPEK SAB go up and down completely randomly.
Pair Corralation between First Majestic and ALPEK SAB
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.41 times more return on investment than ALPEK SAB. However, First Majestic Silver is 2.46 times less risky than ALPEK SAB. It trades about 0.04 of its potential returns per unit of risk. ALPEK SAB de is currently generating about -0.03 per unit of risk. If you would invest 39,591 in First Majestic Silver on August 24, 2024 and sell it today you would earn a total of 8,476 from holding First Majestic Silver or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. ALPEK SAB de
Performance |
| Timeline |
| First Majestic Silver |
| ALPEK SAB de |
First Majestic and ALPEK SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and ALPEK SAB
The main advantage of trading using opposite First Majestic and ALPEK SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, ALPEK SAB 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 ALPEK SAB will offset losses from the drop in ALPEK SAB's long position.| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. CMR SAB de | First Majestic vs. The Select Sector |
| ALPEK SAB vs. Southern Copper | ALPEK SAB vs. McEwen Mining | ALPEK SAB vs. First Majestic Silver | ALPEK SAB vs. United States Steel |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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