Correlation Between First Majestic and Chemours
Can any of the company-specific risk be diversified away by investing in both First Majestic and Chemours 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 Chemours 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 Chemours Co, you can compare the effects of market volatilities on First Majestic and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Chemours.
Diversification Opportunities for First Majestic and Chemours
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Chemours is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of First Majestic i.e., First Majestic and Chemours go up and down completely randomly.
Pair Corralation between First Majestic and Chemours
Allowing for the 90-day total investment horizon First Majestic Silver is expected to under-perform the Chemours. In addition to that, First Majestic is 1.1 times more volatile than Chemours Co. It trades about 0.0 of its total potential returns per unit of risk. Chemours Co is currently generating about 0.01 per unit of volatility. If you would invest 3,104 in Chemours Co on January 19, 2024 and sell it today you would lose (456.00) from holding Chemours Co or give up 14.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
First Majestic Silver vs. Chemours Co
Performance |
| Timeline |
| First Majestic Silver |
| Chemours |
First Majestic and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Chemours
The main advantage of trading using opposite First Majestic and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| First Majestic vs. Endeavour Silver Corp | First Majestic vs. Fortuna Silver Mines | First Majestic vs. Pan American Silver | First Majestic vs. Hecla Mining |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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