Correlation Between Aura Minerals and First Majestic
Can any of the company-specific risk be diversified away by investing in both Aura Minerals 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 Aura Minerals and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and First Majestic Silver, you can compare the effects of market volatilities on Aura Minerals 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 Aura Minerals with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and First Majestic.
Diversification Opportunities for Aura Minerals and First Majestic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aura and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals 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 Aura Minerals 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 Aura Minerals 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 Aura Minerals i.e., Aura Minerals and First Majestic go up and down completely randomly.
Pair Corralation between Aura Minerals and First Majestic
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.86 times more return on investment than First Majestic. However, Aura Minerals is 1.17 times less risky than First Majestic. It trades about 0.08 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 657.00 in Aura Minerals on August 29, 2024 and sell it today you would earn a total of 1,081 from holding Aura Minerals or generate 164.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. First Majestic Silver
Performance |
| Timeline |
| Aura Minerals |
| First Majestic Silver |
Aura Minerals and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and First Majestic
The main advantage of trading using opposite Aura Minerals and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals 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.| Aura Minerals vs. Entree Resources | Aura Minerals vs. Wesdome Gold Mines | Aura Minerals vs. Eastern Platinum Limited | Aura Minerals vs. Platinum Group Metals |
| First Majestic vs. Talon Metals Corp | First Majestic vs. Champion Gaming Group | First Majestic vs. SalesforceCom CDR | First Majestic vs. Gfl Environmental Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |