Correlation Between SilverCrest Metals and First Majestic
Can any of the company-specific risk be diversified away by investing in both SilverCrest 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 SilverCrest 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 SilverCrest Metals and First Majestic Silver, you can compare the effects of market volatilities on SilverCrest 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 SilverCrest Metals with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and First Majestic.
Diversification Opportunities for SilverCrest Metals and First Majestic
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SilverCrest and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest 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 SilverCrest 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 SilverCrest 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 SilverCrest Metals i.e., SilverCrest Metals and First Majestic go up and down completely randomly.
Pair Corralation between SilverCrest Metals and First Majestic
Assuming the 90 days trading horizon SilverCrest Metals is expected to generate 1.31 times more return on investment than First Majestic. However, SilverCrest Metals is 1.31 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 -0.3 per unit of risk. If you would invest 1,484 in SilverCrest Metals on August 29, 2024 and sell it today you would lose (79.00) from holding SilverCrest Metals or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SilverCrest Metals vs. First Majestic Silver
Performance |
| Timeline |
| SilverCrest Metals |
| First Majestic Silver |
SilverCrest Metals and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverCrest Metals and First Majestic
The main advantage of trading using opposite SilverCrest Metals and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest 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.| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox Gold Corp |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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