Correlation Between First Majestic and INVEX Controladora
Can any of the company-specific risk be diversified away by investing in both First Majestic and INVEX Controladora 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 INVEX Controladora 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 INVEX Controladora SAB, you can compare the effects of market volatilities on First Majestic and INVEX Controladora 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 INVEX Controladora. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and INVEX Controladora.
Diversification Opportunities for First Majestic and INVEX Controladora
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and INVEX is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and INVEX Controladora SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVEX Controladora SAB 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 INVEX Controladora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVEX Controladora SAB has no effect on the direction of First Majestic i.e., First Majestic and INVEX Controladora go up and down completely randomly.
Pair Corralation between First Majestic and INVEX Controladora
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the INVEX Controladora. In addition to that, First Majestic is 2.29 times more volatile than INVEX Controladora SAB. It trades about -0.01 of its total potential returns per unit of risk. INVEX Controladora SAB is currently generating about 0.02 per unit of volatility. If you would invest 8,200 in INVEX Controladora SAB on September 26, 2024 and sell it today you would earn a total of 100.00 from holding INVEX Controladora SAB or generate 1.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Majestic Silver vs. INVEX Controladora SAB
Performance |
Timeline |
First Majestic Silver |
INVEX Controladora SAB |
First Majestic and INVEX Controladora Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Majestic and INVEX Controladora
The main advantage of trading using opposite First Majestic and INVEX Controladora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, INVEX Controladora 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 INVEX Controladora will offset losses from the drop in INVEX Controladora's long position.First Majestic vs. McEwen Mining | First Majestic vs. Costco Wholesale | First Majestic vs. Micron Technology | First Majestic vs. The Bank of |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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