Correlation Between First Majestic and Vindicator Silver

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

Diversification Opportunities for First Majestic and Vindicator Silver

-0.59

Correlation Coefficient

First Majestic  Vindicator Silver

Excellent diversification

The 3 months correlation between First and Vindicator is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Vindicator Silver Lead Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vindicator Silver Lead 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 Vindicator Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vindicator Silver Lead has no effect on the direction of First Majestic i.e., First Majestic and Vindicator Silver go up and down completely randomly.

Pair Corralation between First Majestic and Vindicator Silver

If you would invest  15.00  in Vindicator Silver Lead Mining on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Vindicator Silver Lead Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

First Majestic Silver  vs.  Vindicator Silver Lead Mining

First Majestic Silver

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Majestic Silver are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, First Majestic reported solid returns over the last few months and may actually be approaching a breakup point.

Vindicator Silver Lead

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vindicator Silver Lead Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vindicator Silver is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with First Majestic and Vindicator Silver

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

The idea behind First Majestic Silver and Vindicator Silver Lead Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.