Correlation Between First Majestic and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Labrador 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 Labrador 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 Labrador Gold Corp, you can compare the effects of market volatilities on First Majestic and Labrador 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 Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Labrador Gold.
Diversification Opportunities for First Majestic and Labrador Gold
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Labrador is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador 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 Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of First Majestic i.e., First Majestic and Labrador Gold go up and down completely randomly.
Pair Corralation between First Majestic and Labrador Gold
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Labrador Gold. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.67 times less risky than Labrador Gold. The stock trades about -0.4 of its potential returns per unit of risk. The Labrador Gold Corp is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Labrador Gold Corp on August 30, 2024 and sell it today you would lose (1.50) from holding Labrador Gold Corp or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Labrador Gold Corp
Performance |
| Timeline |
| First Majestic Silver |
| Labrador Gold Corp |
First Majestic and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Labrador Gold
The main advantage of trading using opposite First Majestic and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Labrador 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 Labrador Gold will offset losses from the drop in Labrador 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 |
| Labrador Gold vs. Western Copper and | Labrador Gold vs. Ocumetics Technology Corp | Labrador Gold vs. Profound Medical Corp | Labrador Gold vs. Major Drilling Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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