Correlation Between Ivanhoe Electric and First Majestic
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and First Majestic 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 Ivanhoe Electric and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and First Majestic Silver, you can compare the effects of market volatilities on Ivanhoe Electric and First Majestic 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 Ivanhoe Electric with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and First Majestic.
Diversification Opportunities for Ivanhoe Electric and First Majestic
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ivanhoe and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and Ivanhoe Electric 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 Ivanhoe Electric are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and First Majestic go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and First Majestic
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the First Majestic. In addition to that, Ivanhoe Electric is 1.2 times more volatile than First Majestic Silver. It trades about -0.02 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.12 per unit of volatility. If you would invest 545.00 in First Majestic Silver on October 20, 2024 and sell it today you would earn a total of 39.00 from holding First Majestic Silver or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. First Majestic Silver
Performance |
| Timeline |
| Ivanhoe Electric |
| First Majestic Silver |
Ivanhoe Electric and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and First Majestic
The main advantage of trading using opposite Ivanhoe Electric and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Ivanhoe Electric vs. Chester Mining | Ivanhoe Electric vs. Harmony Gold Mining | Ivanhoe Electric vs. Alvotech | Ivanhoe Electric vs. National Waste Management |
| First Majestic vs. Aya Gold Silver | First Majestic vs. Silvercorp Metals | First Majestic vs. Discovery Metals Corp | First Majestic vs. Bald Eagle Gold |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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