Correlation Between Kutcho Copper and First Majestic

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

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

Diversification Opportunities for Kutcho Copper and First Majestic

0.1

Correlation Coefficient

Kutcho Copper  First Majestic

Average diversification

The 3 months correlation between Kutcho and First is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper 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 Kutcho Copper 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 Kutcho Copper 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 Kutcho Copper i.e., Kutcho Copper and First Majestic go up and down completely randomly.

Pair Corralation between Kutcho Copper and First Majestic

Given the investment horizon of 90 days Kutcho Copper Corp is expected to under-perform the First Majestic. In addition to that, Kutcho Copper is 1.5 times more volatile than First Majestic Silver. It trades about -0.08 of its total potential returns per unit of risk. First Majestic Silver is currently generating about -0.11 per unit of volatility. If you would invest  972.00  in First Majestic Silver on September 5, 2024 and sell it today you would lose (80.00) from holding First Majestic Silver or give up 8.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Kutcho Copper Corp  vs.  First Majestic Silver

Kutcho Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kutcho Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kutcho Copper is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First Majestic Silver

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Majestic Silver are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, First Majestic displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kutcho Copper and First Majestic

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

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.