Correlation Between First Majestic and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Newcore 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 Newcore 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 Newcore Gold, you can compare the effects of market volatilities on First Majestic and Newcore 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 Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Newcore Gold.
Diversification Opportunities for First Majestic and Newcore Gold
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Newcore is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore 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 Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of First Majestic i.e., First Majestic and Newcore Gold go up and down completely randomly.
Pair Corralation between First Majestic and Newcore Gold
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Newcore Gold. But the stock apears to be less risky and, when comparing its historical volatility, First Majestic Silver is 1.32 times less risky than Newcore Gold. The stock trades about -0.35 of its potential returns per unit of risk. The Newcore Gold is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Newcore Gold on August 31, 2024 and sell it today you would lose (5.00) from holding Newcore Gold or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Newcore Gold
Performance |
| Timeline |
| First Majestic Silver |
| Newcore Gold |
First Majestic and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Newcore Gold
The main advantage of trading using opposite First Majestic and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Newcore 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 Newcore Gold will offset losses from the drop in Newcore Gold's long position.| First Majestic vs. Nova Leap Health | First Majestic vs. Leveljump Healthcare Corp | First Majestic vs. Perseus Mining | First Majestic vs. CVS HEALTH CDR |
| Newcore Gold vs. Montage Gold Corp | Newcore Gold vs. Revival Gold | Newcore Gold vs. O3 Mining | Newcore Gold vs. Troilus 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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