Correlation Between MAG Silver and First Majestic
Can any of the company-specific risk be diversified away by investing in both MAG Silver 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 MAG Silver and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and First Majestic Silver, you can compare the effects of market volatilities on MAG Silver 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 MAG Silver with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and First Majestic.
Diversification Opportunities for MAG Silver and First Majestic
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAG and First is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp 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 MAG Silver 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 MAG Silver Corp 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 MAG Silver i.e., MAG Silver and First Majestic go up and down completely randomly.
Pair Corralation between MAG Silver and First Majestic
Assuming the 90 days horizon MAG Silver Corp is expected to generate 0.7 times more return on investment than First Majestic. However, MAG Silver Corp is 1.43 times less risky than First Majestic. It trades about 0.02 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.04 per unit of risk. If you would invest 1,437 in MAG Silver Corp on October 26, 2024 and sell it today you would earn a total of 18.00 from holding MAG Silver Corp or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. First Majestic Silver
Performance |
| Timeline |
| MAG Silver Corp |
| First Majestic Silver |
MAG Silver and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and First Majestic
The main advantage of trading using opposite MAG Silver and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver 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.| MAG Silver vs. American Eagle Outfitters | MAG Silver vs. The Yokohama Rubber | MAG Silver vs. Playa Hotels Resorts | MAG Silver vs. Summit Materials |
| First Majestic vs. SYSTEMAIR AB | First Majestic vs. CHINA SOUTHN AIR H | First Majestic vs. Media and Games | First Majestic vs. QINGCI GAMES INC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |