Correlation Between Lomiko Metals and First Majestic
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals 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 Lomiko Metals and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and First Majestic Silver, you can compare the effects of market volatilities on Lomiko Metals 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 Lomiko Metals with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and First Majestic.
Diversification Opportunities for Lomiko Metals and First Majestic
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lomiko and First is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals 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 Lomiko Metals 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 Lomiko Metals 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 Lomiko Metals i.e., Lomiko Metals and First Majestic go up and down completely randomly.
Pair Corralation between Lomiko Metals and First Majestic
Assuming the 90 days horizon Lomiko Metals is expected to generate 3.91 times more return on investment than First Majestic. However, Lomiko Metals is 3.91 times more volatile than First Majestic Silver. It trades about 0.05 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.03 per unit of risk. If you would invest 25.00 in Lomiko Metals on September 2, 2024 and sell it today you would lose (12.00) from holding Lomiko Metals or give up 48.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lomiko Metals vs. First Majestic Silver
Performance |
| Timeline |
| Lomiko Metals |
| First Majestic Silver |
Lomiko Metals and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and First Majestic
The main advantage of trading using opposite Lomiko Metals and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals 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.| Lomiko Metals vs. Osisko Metals | Lomiko Metals vs. Xtract One Technologies | Lomiko Metals vs. Enduro Metals Corp | Lomiko Metals vs. Ocumetics Technology Corp |
| First Majestic vs. Converge Technology Solutions | First Majestic vs. Firan Technology Group | First Majestic vs. Broadcom | First Majestic vs. Perseus Mining |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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