Correlation Between First Majestic and Golden Minerals
Can any of the company-specific risk be diversified away by investing in both First Majestic and Golden Minerals 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 Golden Minerals 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 Golden Minerals, you can compare the effects of market volatilities on First Majestic and Golden Minerals 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 Golden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Golden Minerals.
Diversification Opportunities for First Majestic and Golden Minerals
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Golden is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Golden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Minerals 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 Golden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Minerals has no effect on the direction of First Majestic i.e., First Majestic and Golden Minerals go up and down completely randomly.
Pair Corralation between First Majestic and Golden Minerals
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.51 times more return on investment than Golden Minerals. However, First Majestic Silver is 1.96 times less risky than Golden Minerals. It trades about 0.08 of its potential returns per unit of risk. Golden Minerals is currently generating about 0.0 per unit of risk. If you would invest 785.00 in First Majestic Silver on September 12, 2024 and sell it today you would earn a total of 123.00 from holding First Majestic Silver or generate 15.67% 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. Golden Minerals
Performance |
| Timeline |
| First Majestic Silver |
| Golden Minerals |
First Majestic and Golden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Golden Minerals
The main advantage of trading using opposite First Majestic and Golden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Golden Minerals 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 Golden Minerals will offset losses from the drop in Golden Minerals' long position.| First Majestic vs. Wishpond Technologies | First Majestic vs. 2028 Investment Grade | First Majestic vs. Tree Island Steel | First Majestic vs. Advent Wireless |
| Golden Minerals vs. Tristar Gold | Golden Minerals vs. Trilogy Metals | Golden Minerals vs. Hannan Metals | Golden Minerals vs. Lupaka Gold Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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