Correlation Between Aya Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both Aya 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 Aya 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 Aya Gold Silver and First Majestic Silver, you can compare the effects of market volatilities on Aya 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 Aya Gold with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and First Majestic.
Diversification Opportunities for Aya Gold and First Majestic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aya and First is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver 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 Aya 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 Aya Gold Silver 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 Aya Gold i.e., Aya Gold and First Majestic go up and down completely randomly.
Pair Corralation between Aya Gold and First Majestic
Assuming the 90 days horizon Aya Gold Silver is expected to generate 0.75 times more return on investment than First Majestic. However, Aya Gold Silver is 1.33 times less risky than First Majestic. It trades about -0.01 of its potential returns per unit of risk. First Majestic Silver is currently generating about -0.07 per unit of risk. If you would invest 836.00 in Aya Gold Silver on November 18, 2024 and sell it today you would lose (12.00) from holding Aya Gold Silver or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aya Gold Silver vs. First Majestic Silver
Performance |
| Timeline |
| Aya Gold Silver |
| First Majestic Silver |
Aya Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aya Gold and First Majestic
The main advantage of trading using opposite Aya Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aya 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.| Aya Gold vs. Apollo Silver Corp | Aya Gold vs. Arizona Silver Exploration | Aya Gold vs. Guanajuato Silver | Aya Gold vs. Bald Eagle Gold |
| First Majestic vs. Aya Gold Silver | First Majestic vs. Silvercorp Metals | First Majestic vs. Discovery Metals Corp | First Majestic vs. Bald Eagle 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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