Correlation Between First Majestic and Tamarack Valley

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

Diversification Opportunities for First Majestic and Tamarack Valley

0.86

Correlation Coefficient

First Majestic  Tamarack Valley

Very poor diversification

The 3 months correlation between First and Tamarack is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley Energy 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 Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of First Majestic i.e., First Majestic and Tamarack Valley go up and down completely randomly.

Pair Corralation between First Majestic and Tamarack Valley

Assuming the 90 days horizon First Majestic Silver is expected to generate 2.26 times more return on investment than Tamarack Valley. However, First Majestic is 2.26 times more volatile than Tamarack Valley Energy. It trades about 0.22 of its potential returns per unit of risk. Tamarack Valley Energy is currently generating about 0.17 per unit of risk. If you would invest  1,190  in First Majestic Silver on July 20, 2025 and sell it today you would earn a total of  777.00  from holding First Majestic Silver or generate 65.29% return on investment over 90 days.

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

First Majestic Silver  vs.  Tamarack Valley Energy

First Majestic Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Majestic Silver are ranked lower than 17 (%) 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.

Tamarack Valley Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tamarack Valley Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Tamarack Valley displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Majestic and Tamarack Valley

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

The idea behind First Majestic Silver and Tamarack Valley Energy 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.