Correlation Between First Majestic and Nickel 28

Can any of the company-specific risk be diversified away by investing in both First Majestic and Nickel 28 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 Nickel 28 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 Nickel 28 Capital, you can compare the effects of market volatilities on First Majestic and Nickel 28 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 Nickel 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Nickel 28.

Diversification Opportunities for First Majestic and Nickel 28

0.71

Correlation Coefficient

First Majestic  Nickel 28

Poor diversification

The 3 months correlation between First and Nickel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Nickel 28 Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel 28 Capital 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 Nickel 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel 28 Capital has no effect on the direction of First Majestic i.e., First Majestic and Nickel 28 go up and down completely randomly.

Pair Corralation between First Majestic and Nickel 28

Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Nickel 28. In addition to that, First Majestic is 1.05 times more volatile than Nickel 28 Capital. It trades about -0.08 of its total potential returns per unit of risk. Nickel 28 Capital is currently generating about 0.0 per unit of volatility. If you would invest  79.00  in Nickel 28 Capital on October 6, 2024 and sell it today you would lose (2.00) from holding Nickel 28 Capital or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

First Majestic Silver  vs.  Nickel 28 Capital

First Majestic Silver

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Majestic Silver are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, First Majestic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Nickel 28 Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nickel 28 Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Nickel 28 is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with First Majestic and Nickel 28

The main advantage of trading using opposite First Majestic and Nickel 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Nickel 28 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 Nickel 28 will offset losses from the drop in Nickel 28's long position.

The idea behind First Majestic Silver and Nickel 28 Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..