Correlation Between First Majestic and Torex Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Torex 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 Torex 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 Torex Gold Resources, you can compare the effects of market volatilities on First Majestic and Torex 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 Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Torex Gold.
Diversification Opportunities for First Majestic and Torex Gold
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Torex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources 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 Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of First Majestic i.e., First Majestic and Torex Gold go up and down completely randomly.
Pair Corralation between First Majestic and Torex Gold
Assuming the 90 days horizon First Majestic Silver is expected to under-perform the Torex Gold. In addition to that, First Majestic is 1.4 times more volatile than Torex Gold Resources. It trades about -0.01 of its total potential returns per unit of risk. Torex Gold Resources is currently generating about 0.14 per unit of volatility. If you would invest 2,075 in Torex Gold Resources on August 25, 2024 and sell it today you would earn a total of 1,032 from holding Torex Gold Resources or generate 49.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. Torex Gold Resources
Performance |
| Timeline |
| First Majestic Silver |
| Torex Gold Resources |
First Majestic and Torex Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Torex Gold
The main advantage of trading using opposite First Majestic and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Torex 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 Torex Gold will offset losses from the drop in Torex Gold's long position.| First Majestic vs. Canadian General Investments | First Majestic vs. 2028 Investment Grade | First Majestic vs. Brookfield Investments | First Majestic vs. Upstart Investments |
| Torex Gold vs. OceanaGold | Torex Gold vs. Wesdome Gold Mines | Torex Gold vs. Centerra Gold | Torex Gold vs. Alamos Gold |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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