Correlation Between CanAlaska Uranium and First Majestic
Can any of the company-specific risk be diversified away by investing in both CanAlaska Uranium 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 CanAlaska Uranium and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CanAlaska Uranium and First Majestic Silver, you can compare the effects of market volatilities on CanAlaska Uranium 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 CanAlaska Uranium with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanAlaska Uranium and First Majestic.
Diversification Opportunities for CanAlaska Uranium and First Majestic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CanAlaska and First is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CanAlaska Uranium 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 CanAlaska Uranium 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 CanAlaska Uranium 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 CanAlaska Uranium i.e., CanAlaska Uranium and First Majestic go up and down completely randomly.
Pair Corralation between CanAlaska Uranium and First Majestic
Assuming the 90 days horizon CanAlaska Uranium is expected to generate 1.52 times more return on investment than First Majestic. However, CanAlaska Uranium is 1.52 times more volatile than First Majestic Silver. It trades about 0.05 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 41.00 in CanAlaska Uranium on August 26, 2024 and sell it today you would earn a total of 38.00 from holding CanAlaska Uranium or generate 92.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CanAlaska Uranium vs. First Majestic Silver
Performance |
| Timeline |
| CanAlaska Uranium |
| First Majestic Silver |
CanAlaska Uranium and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CanAlaska Uranium and First Majestic
The main advantage of trading using opposite CanAlaska Uranium and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CanAlaska Uranium 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.| CanAlaska Uranium vs. First Majestic Silver | CanAlaska Uranium vs. Ivanhoe Energy | CanAlaska Uranium vs. Orezone Gold Corp | CanAlaska Uranium vs. Faraday Copper Corp |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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