Correlation Between First Majestic and Golden Arrow
Can any of the company-specific risk be diversified away by investing in both First Majestic and Golden Arrow 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 Arrow 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 Arrow Resources, you can compare the effects of market volatilities on First Majestic and Golden Arrow 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 Arrow. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Golden Arrow.
Diversification Opportunities for First Majestic and Golden Arrow
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Golden is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Golden Arrow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Arrow 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 Golden Arrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Arrow Resources has no effect on the direction of First Majestic i.e., First Majestic and Golden Arrow go up and down completely randomly.
Pair Corralation between First Majestic and Golden Arrow
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.72 times more return on investment than Golden Arrow. However, First Majestic Silver is 1.38 times less risky than Golden Arrow. It trades about 0.06 of its potential returns per unit of risk. Golden Arrow Resources is currently generating about -0.05 per unit of risk. If you would invest 759.00 in First Majestic Silver on November 28, 2024 and sell it today you would earn a total of 24.00 from holding First Majestic Silver or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Golden Arrow Resources
Performance |
| Timeline |
| First Majestic Silver |
| Golden Arrow Resources |
First Majestic and Golden Arrow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Golden Arrow
The main advantage of trading using opposite First Majestic and Golden Arrow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Golden Arrow 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 Arrow will offset losses from the drop in Golden Arrow's long position.| First Majestic vs. Ivanhoe Energy | First Majestic vs. Flinders Resources Limited | First Majestic vs. Orezone Gold Corp | First Majestic vs. Faraday Copper Corp |
| Golden Arrow vs. Orex Minerals | Golden Arrow vs. Avrupa Minerals | Golden Arrow vs. Rockhaven Resources | Golden Arrow vs. Hannan Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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