Correlation Between Mesabi Trust and First Majestic
Can any of the company-specific risk be diversified away by investing in both Mesabi Trust 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 Mesabi Trust and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesabi Trust and First Majestic Silver, you can compare the effects of market volatilities on Mesabi Trust 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 Mesabi Trust with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesabi Trust and First Majestic.
Diversification Opportunities for Mesabi Trust and First Majestic
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mesabi and First is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mesabi Trust 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 Mesabi Trust 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 Mesabi Trust 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 Mesabi Trust i.e., Mesabi Trust and First Majestic go up and down completely randomly.
Pair Corralation between Mesabi Trust and First Majestic
Considering the 90-day investment horizon Mesabi Trust is expected to under-perform the First Majestic. But the stock apears to be less risky and, when comparing its historical volatility, Mesabi Trust is 1.3 times less risky than First Majestic. The stock trades about -0.01 of its potential returns per unit of risk. The First Majestic Silver is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 778.00 in First Majestic Silver on February 7, 2024 and sell it today you would lose (79.00) from holding First Majestic Silver or give up 10.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mesabi Trust vs. First Majestic Silver
Performance |
Timeline |
Mesabi Trust |
First Majestic Silver |
Mesabi Trust and First Majestic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mesabi Trust and First Majestic
The main advantage of trading using opposite Mesabi Trust and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesabi Trust 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.Mesabi Trust vs. Olympic Steel | Mesabi Trust vs. Universal Stainless Alloy | Mesabi Trust vs. POSCO Holdings | Mesabi Trust vs. Outokumpu Oyj ADR |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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