Correlation Between Americas Silver and First Majestic
Can any of the company-specific risk be diversified away by investing in both Americas Silver 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 Americas Silver and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americas Silver Corp and First Majestic Silver, you can compare the effects of market volatilities on Americas Silver 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 Americas Silver with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americas Silver and First Majestic.
Diversification Opportunities for Americas Silver and First Majestic
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Americas and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Americas Silver Corp 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 Americas Silver 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 Americas Silver Corp 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 Americas Silver i.e., Americas Silver and First Majestic go up and down completely randomly.
Pair Corralation between Americas Silver and First Majestic
Assuming the 90 days trading horizon Americas Silver Corp is expected to generate 1.31 times more return on investment than First Majestic. However, Americas Silver is 1.31 times more volatile than First Majestic Silver. It trades about 0.01 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 71.00 in Americas Silver Corp on August 29, 2024 and sell it today you would lose (20.00) from holding Americas Silver Corp or give up 28.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americas Silver Corp vs. First Majestic Silver
Performance |
| Timeline |
| Americas Silver Corp |
| First Majestic Silver |
Americas Silver and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americas Silver and First Majestic
The main advantage of trading using opposite Americas Silver and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americas Silver 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.| Americas Silver vs. Excellon Resources | Americas Silver vs. GoGold Resources | Americas Silver vs. Fortuna Silver Mines | Americas Silver vs. Dolly Varden Silver |
| First Majestic vs. 2028 Investment Grade | First Majestic vs. Western Investment | First Majestic vs. Atrium Mortgage Investment | First Majestic vs. Air Canada |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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