Correlation Between Starcore International and First Majestic
Can any of the company-specific risk be diversified away by investing in both Starcore International 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 Starcore International and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Starcore International Mines and First Majestic Silver, you can compare the effects of market volatilities on Starcore International 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 Starcore International with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starcore International and First Majestic.
Diversification Opportunities for Starcore International and First Majestic
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Starcore and First is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Starcore International Mines 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 Starcore International 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 Starcore International Mines 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 Starcore International i.e., Starcore International and First Majestic go up and down completely randomly.
Pair Corralation between Starcore International and First Majestic
Assuming the 90 days trading horizon Starcore International Mines is expected to generate 2.22 times more return on investment than First Majestic. However, Starcore International is 2.22 times more volatile than First Majestic Silver. It trades about 0.03 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.02 per unit of risk. If you would invest 18.00 in Starcore International Mines on September 6, 2024 and sell it today you would lose (4.00) from holding Starcore International Mines or give up 22.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Starcore International Mines vs. First Majestic Silver
Performance |
Timeline |
Starcore International |
First Majestic Silver |
Starcore International and First Majestic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Starcore International and First Majestic
The main advantage of trading using opposite Starcore International and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starcore International 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.Starcore International vs. Yorbeau Resources | Starcore International vs. Canagold Resources | Starcore International vs. Silver Grail Resources | Starcore International vs. Inventus Mining Corp |
First Majestic vs. Canlan Ice Sports | First Majestic vs. Advent Wireless | First Majestic vs. Capstone Mining Corp | First Majestic vs. Monument Mining Limited |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |