Correlation Between First Majestic and Snowline Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Snowline 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 Snowline 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 Snowline Gold Corp, you can compare the effects of market volatilities on First Majestic and Snowline 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 Snowline Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Snowline Gold.
Diversification Opportunities for First Majestic and Snowline Gold
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Snowline is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Snowline Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowline 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 Snowline Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snowline Gold Corp has no effect on the direction of First Majestic i.e., First Majestic and Snowline Gold go up and down completely randomly.
Pair Corralation between First Majestic and Snowline Gold
Assuming the 90 days horizon First Majestic Silver is expected to generate 1.98 times more return on investment than Snowline Gold. However, First Majestic is 1.98 times more volatile than Snowline Gold Corp. It trades about 0.13 of its potential returns per unit of risk. Snowline Gold Corp is currently generating about 0.23 per unit of risk. If you would invest 791.00 in First Majestic Silver on October 23, 2024 and sell it today you would earn a total of 55.00 from holding First Majestic Silver or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Snowline Gold Corp
Performance |
| Timeline |
| First Majestic Silver |
| Snowline Gold Corp |
First Majestic and Snowline Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Snowline Gold
The main advantage of trading using opposite First Majestic and Snowline Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Snowline 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 Snowline Gold will offset losses from the drop in Snowline Gold's long position.| First Majestic vs. Dream Office Real | First Majestic vs. Cogeco Communications | First Majestic vs. Blackrock Silver Corp | First Majestic vs. Computer Modelling Group |
| Snowline Gold vs. Ramp Metals | Snowline Gold vs. SalesforceCom CDR | Snowline Gold vs. Leading Edge Materials | Snowline Gold vs. Lion One Metals |
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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