Correlation Between First Majestic and Prosper Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Prosper 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 Prosper 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 Prosper Gold Corp, you can compare the effects of market volatilities on First Majestic and Prosper 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 Prosper Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Prosper Gold.
Diversification Opportunities for First Majestic and Prosper Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Prosper is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper 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 Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of First Majestic i.e., First Majestic and Prosper Gold go up and down completely randomly.
Pair Corralation between First Majestic and Prosper Gold
Assuming the 90 days horizon First Majestic is expected to generate 2.78 times less return on investment than Prosper Gold. But when comparing it to its historical volatility, First Majestic Silver is 1.83 times less risky than Prosper Gold. It trades about 0.01 of its potential returns per unit of risk. Prosper Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Prosper Gold Corp on November 1, 2024 and sell it today you would lose (9.50) from holding Prosper Gold Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Prosper Gold Corp
Performance |
| Timeline |
| First Majestic Silver |
| Prosper Gold Corp |
First Majestic and Prosper Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Prosper Gold
The main advantage of trading using opposite First Majestic and Prosper Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Prosper 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 Prosper Gold will offset losses from the drop in Prosper Gold's long position.| First Majestic vs. Cogeco Communications | First Majestic vs. Hemisphere Energy | First Majestic vs. Quorum Information Technologies | First Majestic vs. Maple Leaf Foods |
| Prosper Gold vs. Metalero Mining Corp | Prosper Gold vs. Leons Furniture Limited | Prosper Gold vs. Evertz Technologies Limited | Prosper Gold vs. Quipt Home Medical |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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