Correlation Between First Majestic and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both First Majestic and Newmont Goldcorp 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 Newmont Goldcorp 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 Newmont Goldcorp Corp, you can compare the effects of market volatilities on First Majestic and Newmont Goldcorp 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 Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Newmont Goldcorp.
Diversification Opportunities for First Majestic and Newmont Goldcorp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Newmont is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp 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 Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of First Majestic i.e., First Majestic and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between First Majestic and Newmont Goldcorp
Allowing for the 90-day total investment horizon First Majestic is expected to generate 1.53 times less return on investment than Newmont Goldcorp. In addition to that, First Majestic is 2.1 times more volatile than Newmont Goldcorp Corp. It trades about 0.12 of its total potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.39 per unit of volatility. If you would invest 3,702 in Newmont Goldcorp Corp on October 20, 2024 and sell it today you would earn a total of 465.00 from holding Newmont Goldcorp Corp or generate 12.56% 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. Newmont Goldcorp Corp
Performance |
| Timeline |
| First Majestic Silver |
| Newmont Goldcorp Corp |
First Majestic and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Newmont Goldcorp
The main advantage of trading using opposite First Majestic and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Newmont Goldcorp 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 Newmont Goldcorp will offset losses from the drop in Newmont Goldcorp's long position.| First Majestic vs. Aya Gold Silver | First Majestic vs. Silvercorp Metals | First Majestic vs. Discovery Metals Corp | First Majestic vs. Bald Eagle Gold |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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