Correlation Between First Majestic and FibraHotel
Can any of the company-specific risk be diversified away by investing in both First Majestic and FibraHotel 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 FibraHotel 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 FibraHotel, you can compare the effects of market volatilities on First Majestic and FibraHotel 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 FibraHotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and FibraHotel.
Diversification Opportunities for First Majestic and FibraHotel
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and FibraHotel is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and FibraHotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibraHotel 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 FibraHotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibraHotel has no effect on the direction of First Majestic i.e., First Majestic and FibraHotel go up and down completely randomly.
Pair Corralation between First Majestic and FibraHotel
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the FibraHotel. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 4.62 times less risky than FibraHotel. The stock trades about -0.17 of its potential returns per unit of risk. The FibraHotel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 990.00 in FibraHotel on October 20, 2024 and sell it today you would lose (21.00) from holding FibraHotel or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. FibraHotel
Performance |
| Timeline |
| First Majestic Silver |
| FibraHotel |
First Majestic and FibraHotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and FibraHotel
The main advantage of trading using opposite First Majestic and FibraHotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, FibraHotel 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 FibraHotel will offset losses from the drop in FibraHotel's long position.| First Majestic vs. Grupo Hotelero Santa | First Majestic vs. Martin Marietta Materials | First Majestic vs. Grupo Industrial Saltillo | First Majestic vs. Lloyds Banking Group |
| FibraHotel vs. The Home Depot | FibraHotel vs. KB Home | FibraHotel vs. Hoteles City Express | FibraHotel vs. Costco Wholesale |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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