Correlation Between First Majestic and Canagold Resources
Can any of the company-specific risk be diversified away by investing in both First Majestic and Canagold Resources 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 Canagold Resources 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 Canagold Resources, you can compare the effects of market volatilities on First Majestic and Canagold Resources 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 Canagold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Canagold Resources.
Diversification Opportunities for First Majestic and Canagold Resources
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Canagold is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Canagold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canagold Resources 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 Canagold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canagold Resources has no effect on the direction of First Majestic i.e., First Majestic and Canagold Resources go up and down completely randomly.
Pair Corralation between First Majestic and Canagold Resources
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Canagold Resources. In addition to that, First Majestic is 1.06 times more volatile than Canagold Resources. It trades about -0.25 of its total potential returns per unit of risk. Canagold Resources is currently generating about 0.01 per unit of volatility. If you would invest 30.00 in Canagold Resources on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Canagold Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Canagold Resources
Performance |
| Timeline |
| First Majestic Silver |
| Canagold Resources |
First Majestic and Canagold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Canagold Resources
The main advantage of trading using opposite First Majestic and Canagold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Canagold Resources 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 Canagold Resources will offset losses from the drop in Canagold Resources' long position.| First Majestic vs. Converge Technology Solutions | First Majestic vs. Firan Technology Group | First Majestic vs. Broadcom | First Majestic vs. Perseus Mining |
| Canagold Resources vs. Starcore International Mines | Canagold Resources vs. Chesapeake Gold Corp | Canagold Resources vs. Emergent Metals Corp | Canagold Resources vs. Galantas 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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