Correlation Between First Majestic and Ternium SA
Can any of the company-specific risk be diversified away by investing in both First Majestic and Ternium SA 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 Ternium SA 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 Ternium SA ADR, you can compare the effects of market volatilities on First Majestic and Ternium SA 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 Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Ternium SA.
Diversification Opportunities for First Majestic and Ternium SA
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Ternium is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Ternium SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA ADR 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 Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA ADR has no effect on the direction of First Majestic i.e., First Majestic and Ternium SA go up and down completely randomly.
Pair Corralation between First Majestic and Ternium SA
Allowing for the 90-day total investment horizon First Majestic Silver is expected to generate 1.88 times more return on investment than Ternium SA. However, First Majestic is 1.88 times more volatile than Ternium SA ADR. It trades about 0.15 of its potential returns per unit of risk. Ternium SA ADR is currently generating about 0.13 per unit of risk. If you would invest 688.00 in First Majestic Silver on June 2, 2025 and sell it today you would earn a total of 226.00 from holding First Majestic Silver or generate 32.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Ternium SA ADR
Performance |
| Timeline |
| First Majestic Silver |
| Ternium SA ADR |
First Majestic and Ternium SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Ternium SA
The main advantage of trading using opposite First Majestic and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Ternium SA 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 Ternium SA will offset losses from the drop in Ternium SA's long position.| First Majestic vs. MAG Silver Corp | First Majestic vs. Silvercorp Metals | First Majestic vs. Aya Gold Silver | First Majestic vs. Reyna Silver Corp |
| Ternium SA vs. Gold Resource | Ternium SA vs. McEwen Mining | Ternium SA vs. Paramount Gold Nevada | Ternium SA vs. Vista Gold |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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