Correlation Between First Majestic and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Barrick Gold 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 Barrick Gold 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 Barrick Gold Corp, you can compare the effects of market volatilities on First Majestic and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Barrick Gold.
Diversification Opportunities for First Majestic and Barrick Gold
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Barrick is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of First Majestic i.e., First Majestic and Barrick Gold go up and down completely randomly.
Pair Corralation between First Majestic and Barrick Gold
Assuming the 90 days horizon First Majestic Silver is expected to generate 1.86 times more return on investment than Barrick Gold. However, First Majestic is 1.86 times more volatile than Barrick Gold Corp. It trades about 0.05 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.05 per unit of risk. If you would invest 625.00 in First Majestic Silver on November 4, 2024 and sell it today you would earn a total of 203.00 from holding First Majestic Silver or generate 32.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Barrick Gold Corp
Performance |
| Timeline |
| First Majestic Silver |
| Barrick Gold Corp |
First Majestic and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Barrick Gold
The main advantage of trading using opposite First Majestic and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| First Majestic vs. Contagious Gaming | First Majestic vs. WELL Health Technologies | First Majestic vs. Champion Gaming Group | First Majestic vs. Advent Wireless |
| Barrick Gold vs. Kinross Gold Corp | Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Suncor Energy | Barrick Gold vs. Canadian Natural Resources |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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