Correlation Between First Majestic and Chemours
Can any of the company-specific risk be diversified away by investing in both First Majestic and Chemours 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 Chemours 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 The Chemours, you can compare the effects of market volatilities on First Majestic and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Chemours.
Diversification Opportunities for First Majestic and Chemours
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Chemours is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and The Chemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of First Majestic i.e., First Majestic and Chemours go up and down completely randomly.
Pair Corralation between First Majestic and Chemours
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Chemours. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 3.41 times less risky than Chemours. The stock trades about -0.01 of its potential returns per unit of risk. The The Chemours is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 39,702 in The Chemours on September 4, 2024 and sell it today you would lose (1,195) from holding The Chemours or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
First Majestic Silver vs. The Chemours
Performance |
| Timeline |
| First Majestic Silver |
| Chemours |
First Majestic and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Chemours
The main advantage of trading using opposite First Majestic and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. Tesla Inc | First Majestic vs. G Collado SAB |
| Chemours vs. Deutsche Bank Aktiengesellschaft | Chemours vs. GMxico Transportes SAB | Chemours vs. United States Steel | Chemours vs. Applied Materials |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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