Correlation Between Stillwater Critical and First Majestic
Can any of the company-specific risk be diversified away by investing in both Stillwater Critical 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 Stillwater Critical and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stillwater Critical Minerals and First Majestic Silver, you can compare the effects of market volatilities on Stillwater Critical 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 Stillwater Critical with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stillwater Critical and First Majestic.
Diversification Opportunities for Stillwater Critical and First Majestic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stillwater and First is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stillwater Critical 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 Stillwater Critical 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 Stillwater Critical 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 Stillwater Critical i.e., Stillwater Critical and First Majestic go up and down completely randomly.
Pair Corralation between Stillwater Critical and First Majestic
Assuming the 90 days horizon Stillwater Critical Minerals is expected to under-perform the First Majestic. In addition to that, Stillwater Critical is 3.01 times more volatile than First Majestic Silver. It trades about -0.15 of its total potential returns per unit of risk. First Majestic Silver is currently generating about -0.29 per unit of volatility. If you would invest 1,028 in First Majestic Silver on September 1, 2024 and sell it today you would lose (160.00) from holding First Majestic Silver or give up 15.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stillwater Critical Minerals vs. First Majestic Silver
Performance |
| Timeline |
| Stillwater Critical |
| First Majestic Silver |
Stillwater Critical and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stillwater Critical and First Majestic
The main advantage of trading using opposite Stillwater Critical and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stillwater Critical 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.| Stillwater Critical vs. Grid Metals Corp | Stillwater Critical vs. Strikepoint Gold | Stillwater Critical vs. New Age Metals | Stillwater Critical vs. Grande Portage Resources |
| First Majestic vs. Slate Grocery REIT | First Majestic vs. Toronto Dominion Bank | First Majestic vs. Enduro Metals Corp | First Majestic vs. Intact Financial Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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