Correlation Between First Majestic and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Lundin 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 Lundin 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 Lundin Gold, you can compare the effects of market volatilities on First Majestic and Lundin 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 Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Lundin Gold.
Diversification Opportunities for First Majestic and Lundin Gold
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Lundin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold 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 Lundin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Gold has no effect on the direction of First Majestic i.e., First Majestic and Lundin Gold go up and down completely randomly.
Pair Corralation between First Majestic and Lundin Gold
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Lundin Gold. In addition to that, First Majestic is 1.1 times more volatile than Lundin Gold. It trades about -0.31 of its total potential returns per unit of risk. Lundin Gold is currently generating about -0.05 per unit of volatility. If you would invest 3,345 in Lundin Gold on August 29, 2024 and sell it today you would lose (121.00) from holding Lundin Gold or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Lundin Gold
Performance |
| Timeline |
| First Majestic Silver |
| Lundin Gold |
First Majestic and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Lundin Gold
The main advantage of trading using opposite First Majestic and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Lundin 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 Lundin Gold will offset losses from the drop in Lundin Gold's long position.| First Majestic vs. 2028 Investment Grade | First Majestic vs. Western Investment | First Majestic vs. Atrium Mortgage Investment | First Majestic vs. Air Canada |
| Lundin Gold vs. Osisko Gold Ro | Lundin Gold vs. Dundee Precious Metals | Lundin Gold vs. SSR Mining | Lundin Gold vs. Sandstorm Gold Ltd |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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