Correlation Between Trigon Metals and First Majestic
Can any of the company-specific risk be diversified away by investing in both Trigon 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 Trigon 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 Trigon Metals and First Majestic Silver, you can compare the effects of market volatilities on Trigon 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 Trigon Metals with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trigon Metals and First Majestic.
Diversification Opportunities for Trigon Metals and First Majestic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trigon and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Trigon 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 Trigon 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 Trigon 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 Trigon Metals i.e., Trigon Metals and First Majestic go up and down completely randomly.
Pair Corralation between Trigon Metals and First Majestic
Given the investment horizon of 90 days Trigon Metals is expected to generate 0.65 times more return on investment than First Majestic. However, Trigon Metals is 1.55 times less risky than First Majestic. It trades about -0.12 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.29 per unit of risk. If you would invest 88.00 in Trigon Metals on September 1, 2024 and sell it today you would lose (4.00) from holding Trigon Metals or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trigon Metals vs. First Majestic Silver
Performance |
| Timeline |
| Trigon Metals |
| First Majestic Silver |
Trigon Metals and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trigon Metals and First Majestic
The main advantage of trading using opposite Trigon Metals and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trigon 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.| Trigon Metals vs. iMetal Resources | Trigon Metals vs. Mountain Boy Minerals | Trigon Metals vs. Stroud Resources | Trigon Metals vs. Golden Goliath 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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