Correlation Between First Majestic and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both First Majestic and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on First Majestic and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and McEwen Mining.
Diversification Opportunities for First Majestic and McEwen Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and McEwen is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of First Majestic i.e., First Majestic and McEwen Mining go up and down completely randomly.
Pair Corralation between First Majestic and McEwen Mining
If you would invest 19,800 in McEwen Mining on August 24, 2024 and sell it today you would earn a total of 0.00 from holding McEwen Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First Majestic Silver vs. McEwen Mining
Performance |
| Timeline |
| First Majestic Silver |
| McEwen Mining |
First Majestic and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and McEwen Mining
The main advantage of trading using opposite First Majestic and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining'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 |
| McEwen Mining vs. Verizon Communications | McEwen Mining vs. Monster Beverage Corp | McEwen Mining vs. CVS Health | McEwen Mining vs. Grupo Sports World |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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