Correlation Between MAG Silver and First Majestic
Can any of the company-specific risk be diversified away by investing in both MAG Silver 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 MAG Silver and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and First Majestic Silver, you can compare the effects of market volatilities on MAG Silver 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 MAG Silver with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and First Majestic.
Diversification Opportunities for MAG Silver and First Majestic
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MAG and First is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp 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 MAG Silver 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 MAG Silver Corp 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 MAG Silver i.e., MAG Silver and First Majestic go up and down completely randomly.
Pair Corralation between MAG Silver and First Majestic
Considering the 90-day investment horizon MAG Silver Corp is expected to generate 0.76 times more return on investment than First Majestic. However, MAG Silver Corp is 1.31 times less risky than First Majestic. It trades about 0.31 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.2 per unit of risk. If you would invest 956.00 in MAG Silver Corp on January 20, 2024 and sell it today you would earn a total of 258.00 from holding MAG Silver Corp or generate 26.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. First Majestic Silver
Performance |
| Timeline |
| MAG Silver Corp |
| First Majestic Silver |
MAG Silver and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and First Majestic
The main advantage of trading using opposite MAG Silver and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver 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.| MAG Silver vs. Silvercorp Metals | MAG Silver vs. Dolly Varden Silver | MAG Silver vs. Aya Gold Silver | MAG Silver vs. Reyna SilverCorp |
| First Majestic vs. Aya Gold Silver | First Majestic vs. Silvercorp Metals | First Majestic vs. Discovery Metals Corp | First Majestic vs. Santacruz Silv |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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