Correlation Between First Majestic and Independence Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Independence 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 Independence 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 Independence Gold Corp, you can compare the effects of market volatilities on First Majestic and Independence 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 Independence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Independence Gold.
Diversification Opportunities for First Majestic and Independence Gold
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Independence is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Independence Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence 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 Independence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Gold Corp has no effect on the direction of First Majestic i.e., First Majestic and Independence Gold go up and down completely randomly.
Pair Corralation between First Majestic and Independence Gold
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.58 times more return on investment than Independence Gold. However, First Majestic Silver is 1.73 times less risky than Independence Gold. It trades about -0.41 of its potential returns per unit of risk. Independence Gold Corp is currently generating about -0.39 per unit of risk. If you would invest 1,106 in First Majestic Silver on August 30, 2024 and sell it today you would lose (245.00) from holding First Majestic Silver or give up 22.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Majestic Silver vs. Independence Gold Corp
Performance |
| Timeline |
| First Majestic Silver |
| Independence Gold Corp |
First Majestic and Independence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Independence Gold
The main advantage of trading using opposite First Majestic and Independence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Independence 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 Independence Gold will offset losses from the drop in Independence Gold's long position.| First Majestic vs. Canso Select Opportunities | First Majestic vs. Caribbean Utilities | First Majestic vs. Toronto Dominion Bank | First Majestic vs. Diamond Estates Wines |
| Independence Gold vs. Kesselrun Resources | Independence Gold vs. Altiplano Metals | Independence Gold vs. Rockhaven Resources | Independence Gold vs. Magnum Goldcorp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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