Correlation Between First Majestic and American Manganese
Can any of the company-specific risk be diversified away by investing in both First Majestic and American Manganese 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 First Majestic and American Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and American Manganese, you can compare the effects of market volatilities on First Majestic and American Manganese 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 First Majestic with a short position of American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and American Manganese.
Diversification Opportunities for First Majestic and American Manganese
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and American is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese and First Majestic 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 First Majestic Silver are associated (or correlated) with American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of First Majestic i.e., First Majestic and American Manganese go up and down completely randomly.
Pair Corralation between First Majestic and American Manganese
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.51 times more return on investment than American Manganese. However, First Majestic Silver is 1.95 times less risky than American Manganese. It trades about -0.02 of its potential returns per unit of risk. American Manganese is currently generating about -0.1 per unit of risk. If you would invest 835.00 in First Majestic Silver on December 1, 2024 and sell it today you would lose (60.00) from holding First Majestic Silver or give up 7.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Majestic Silver vs. American Manganese
Performance |
Timeline |
First Majestic Silver |
American Manganese |
First Majestic and American Manganese Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Majestic and American Manganese
The main advantage of trading using opposite First Majestic and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.First Majestic vs. Ivanhoe Energy | First Majestic vs. Flinders Resources Limited | First Majestic vs. Orezone Gold Corp | First Majestic vs. Faraday Copper Corp |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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