Correlation Between US Bancorp and First Majestic
Can any of the company-specific risk be diversified away by investing in both US Bancorp 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 US Bancorp and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and First Majestic Silver, you can compare the effects of market volatilities on US Bancorp 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 US Bancorp with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and First Majestic.
Diversification Opportunities for US Bancorp and First Majestic
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between USB and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp 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 US Bancorp 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 US Bancorp 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 US Bancorp i.e., US Bancorp and First Majestic go up and down completely randomly.
Pair Corralation between US Bancorp and First Majestic
Assuming the 90 days trading horizon US Bancorp is expected to generate 2.23 times more return on investment than First Majestic. However, US Bancorp is 2.23 times more volatile than First Majestic Silver. It trades about 0.11 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.52 per unit of risk. If you would invest 98,690 in US Bancorp on September 4, 2024 and sell it today you would earn a total of 2,860 from holding US Bancorp or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
US Bancorp vs. First Majestic Silver
Performance |
| Timeline |
| US Bancorp |
| First Majestic Silver |
US Bancorp and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and First Majestic
The main advantage of trading using opposite US Bancorp and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp 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.| US Bancorp vs. Genworth Financial | US Bancorp vs. DXC Technology | US Bancorp vs. GMxico Transportes SAB | US Bancorp vs. Costco Wholesale |
| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. Tesla Inc | First Majestic vs. G Collado SAB |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |