Correlation Between Triple Flag and First Majestic
Can any of the company-specific risk be diversified away by investing in both Triple Flag 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 Triple Flag and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and First Majestic Silver, you can compare the effects of market volatilities on Triple Flag 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 Triple Flag with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and First Majestic.
Diversification Opportunities for Triple Flag and First Majestic
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Triple and First is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious 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 Triple Flag 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 Triple Flag Precious 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 Triple Flag i.e., Triple Flag and First Majestic go up and down completely randomly.
Pair Corralation between Triple Flag and First Majestic
Assuming the 90 days trading horizon Triple Flag Precious is expected to generate 0.44 times more return on investment than First Majestic. However, Triple Flag Precious is 2.25 times less risky than First Majestic. It trades about -0.23 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.11 per unit of risk. If you would invest 2,347 in Triple Flag Precious on October 10, 2024 and sell it today you would lose (155.00) from holding Triple Flag Precious or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triple Flag Precious vs. First Majestic Silver
Performance |
| Timeline |
| Triple Flag Precious |
| First Majestic Silver |
Triple Flag and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triple Flag and First Majestic
The main advantage of trading using opposite Triple Flag and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag 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.| Triple Flag vs. Falcon Energy Materials | Triple Flag vs. Gatos Silver | Triple Flag vs. Globex Mining Enterprises | Triple Flag vs. Nicola Mining |
| First Majestic vs. Doman Building Materials | First Majestic vs. CVW CleanTech | First Majestic vs. Advent Wireless | First Majestic vs. Altair Resources |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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