Correlation Between Silvercorp Metals and First Majestic
Can any of the company-specific risk be diversified away by investing in both Silvercorp 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 Silvercorp 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 Silvercorp Metals and First Majestic Silver, you can compare the effects of market volatilities on Silvercorp 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 Silvercorp Metals with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silvercorp Metals and First Majestic.
Diversification Opportunities for Silvercorp Metals and First Majestic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Silvercorp and First is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Silvercorp 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 Silvercorp 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 Silvercorp 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 Silvercorp Metals i.e., Silvercorp Metals and First Majestic go up and down completely randomly.
Pair Corralation between Silvercorp Metals and First Majestic
Assuming the 90 days trading horizon Silvercorp Metals is expected to generate 0.88 times more return on investment than First Majestic. However, Silvercorp Metals is 1.14 times less risky than First Majestic. It trades about 0.07 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 303.00 in Silvercorp Metals on August 26, 2024 and sell it today you would earn a total of 176.00 from holding Silvercorp Metals or generate 58.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silvercorp Metals vs. First Majestic Silver
Performance |
| Timeline |
| Silvercorp Metals |
| First Majestic Silver |
Silvercorp Metals and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silvercorp Metals and First Majestic
The main advantage of trading using opposite Silvercorp Metals and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silvercorp 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.| Silvercorp Metals vs. First Majestic Silver | Silvercorp Metals vs. Ivanhoe Energy | Silvercorp Metals vs. Orezone Gold Corp | Silvercorp Metals vs. Faraday Copper Corp |
| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
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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