Correlation Between First Majestic and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both First Majestic and Seabridge 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 Seabridge 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 Seabridge Gold, you can compare the effects of market volatilities on First Majestic and Seabridge 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 Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Seabridge Gold.
Diversification Opportunities for First Majestic and Seabridge Gold
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Seabridge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge 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 Seabridge Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seabridge Gold has no effect on the direction of First Majestic i.e., First Majestic and Seabridge Gold go up and down completely randomly.
Pair Corralation between First Majestic and Seabridge Gold
Allowing for the 90-day total investment horizon First Majestic Silver is expected to generate 1.57 times more return on investment than Seabridge Gold. However, First Majestic is 1.57 times more volatile than Seabridge Gold. It trades about 0.12 of its potential returns per unit of risk. Seabridge Gold is currently generating about 0.08 per unit of risk. If you would invest 545.00 in First Majestic Silver on October 20, 2024 and sell it today you would earn a total of 39.00 from holding First Majestic Silver or generate 7.16% 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. Seabridge Gold
Performance |
| Timeline |
| First Majestic Silver |
| Seabridge Gold |
First Majestic and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and Seabridge Gold
The main advantage of trading using opposite First Majestic and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Seabridge 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 Seabridge Gold will offset losses from the drop in Seabridge Gold'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 |
| Seabridge Gold vs. Franco Nevada | Seabridge Gold vs. Wheaton Precious Metals | Seabridge Gold vs. Osisko Gold Ro | Seabridge Gold vs. Sandstorm Gold Ltd |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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