Correlation Between First Majestic and Light Science

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

Diversification Opportunities for First Majestic and Light Science

-0.7

Correlation Coefficient

First Majestic  Light Science

Excellent diversification

The 3 months correlation between First and Light is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of First Majestic i.e., First Majestic and Light Science go up and down completely randomly.

Pair Corralation between First Majestic and Light Science

Assuming the 90 days trading horizon First Majestic Silver is expected to generate 1.85 times more return on investment than Light Science. However, First Majestic is 1.85 times more volatile than Light Science Technologies. It trades about 0.16 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.18 per unit of risk. If you would invest  865.00  in First Majestic Silver on April 24, 2025 and sell it today you would earn a total of  328.00  from holding First Majestic Silver or generate 37.92% return on investment over 90 days.

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

First Majestic Silver  vs.  Light Science Technologies

First Majestic Silver

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Majestic Silver are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, First Majestic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Light Science Techno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Light Science Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with First Majestic and Light Science

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

The idea behind First Majestic Silver and Light Science Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.