Correlation Between New Destiny and First Majestic
Can any of the company-specific risk be diversified away by investing in both New Destiny 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 New Destiny and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Destiny Mining and First Majestic Silver, you can compare the effects of market volatilities on New Destiny 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 New Destiny with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Destiny and First Majestic.
Diversification Opportunities for New Destiny and First Majestic
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and First is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding New Destiny Mining 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 New Destiny 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 New Destiny Mining 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 New Destiny i.e., New Destiny and First Majestic go up and down completely randomly.
Pair Corralation between New Destiny and First Majestic
Assuming the 90 days horizon New Destiny Mining is expected to under-perform the First Majestic. In addition to that, New Destiny is 2.64 times more volatile than First Majestic Silver. It trades about -0.3 of its total potential returns per unit of risk. First Majestic Silver is currently generating about -0.3 per unit of volatility. If you would invest 1,063 in First Majestic Silver on August 26, 2024 and sell it today you would lose (182.00) from holding First Majestic Silver or give up 17.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Destiny Mining vs. First Majestic Silver
Performance |
| Timeline |
| New Destiny Mining |
| First Majestic Silver |
New Destiny and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Destiny and First Majestic
The main advantage of trading using opposite New Destiny and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Destiny 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.| New Destiny vs. T2 Metals Corp | New Destiny vs. Endeavour Silver Corp | New Destiny vs. Major Drilling Group | New Destiny vs. Vizsla Silver Corp |
| First Majestic vs. Maple Leaf Foods | First Majestic vs. Goodfood Market Corp | First Majestic vs. Queens Road Capital | First Majestic vs. Quisitive Technology Solutions |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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