Correlation Between AuQ Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both AuQ Gold and First Majestic 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 AuQ Gold and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AuQ Gold Mining and First Majestic Silver, you can compare the effects of market volatilities on AuQ Gold and First Majestic 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 AuQ Gold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuQ Gold and First Majestic.
Diversification Opportunities for AuQ Gold and First Majestic
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AuQ and First is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AuQ Gold Mining and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and AuQ Gold 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 AuQ Gold Mining are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of AuQ Gold i.e., AuQ Gold and First Majestic go up and down completely randomly.
Pair Corralation between AuQ Gold and First Majestic
Assuming the 90 days horizon AuQ Gold Mining is expected to generate 2.26 times more return on investment than First Majestic. However, AuQ Gold is 2.26 times more volatile than First Majestic Silver. It trades about 0.03 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 25.00 in AuQ Gold Mining on September 12, 2024 and sell it today you would lose (6.00) from holding AuQ Gold Mining or give up 24.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AuQ Gold Mining vs. First Majestic Silver
Performance |
| Timeline |
| AuQ Gold Mining |
| First Majestic Silver |
AuQ Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AuQ Gold and First Majestic
The main advantage of trading using opposite AuQ Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuQ Gold position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| AuQ Gold vs. Intact Financial Corp | AuQ Gold vs. Costco Wholesale Corp | AuQ Gold vs. Algonquin Power Utilities | AuQ Gold vs. Plaza Retail REIT |
| First Majestic vs. Wishpond Technologies | First Majestic vs. 2028 Investment Grade | First Majestic vs. Tree Island Steel | First Majestic vs. Advent Wireless |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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