Correlation Between Organizacin Cultiba and First Majestic

Can any of the company-specific risk be diversified away by investing in both Organizacin Cultiba 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 Organizacin Cultiba and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Organizacin Cultiba SAB and First Majestic Silver, you can compare the effects of market volatilities on Organizacin Cultiba 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 Organizacin Cultiba with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organizacin Cultiba and First Majestic.

Diversification Opportunities for Organizacin Cultiba and First Majestic

0.28

Correlation Coefficient

Organizacin Cultiba  First Majestic

Modest diversification

The 3 months correlation between Organizacin and First is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Organizacin Cultiba SAB 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 Organizacin Cultiba 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 Organizacin Cultiba SAB 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 Organizacin Cultiba i.e., Organizacin Cultiba and First Majestic go up and down completely randomly.

Pair Corralation between Organizacin Cultiba and First Majestic

Assuming the 90 days trading horizon Organizacin Cultiba SAB is expected to under-perform the First Majestic. In addition to that, Organizacin Cultiba is 1.74 times more volatile than First Majestic Silver. It trades about -0.03 of its total potential returns per unit of risk. First Majestic Silver is currently generating about -0.03 per unit of volatility. If you would invest  49,147  in First Majestic Silver on September 17, 2024 and sell it today you would lose (860.00) from holding First Majestic Silver or give up 1.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Organizacin Cultiba SAB  vs.  First Majestic Silver

Organizacin Cultiba SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Organizacin Cultiba SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Organizacin Cultiba is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Majestic Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Majestic Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, First Majestic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Organizacin Cultiba and First Majestic

The main advantage of trading using opposite Organizacin Cultiba and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organizacin Cultiba 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.

The idea behind Organizacin Cultiba SAB and First Majestic Silver 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.